- Amended Annual Report (10-K/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

FORM 10 -K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 ( d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE S E CURITI E S EXCHA N GE ACT OF 1934

For the transition period from to

Commission file number: 00 0 - 51312

SHENGTAI PHARMACEUTICAL, INC.

(formerly known as West Coast Car Company)

(Exact name of registrant as specified in i t s charter )

Delaware		54-2155579
State or other jurisdiction of organization		(I.R.S. Employer incorporation or identification No.)

Changda Road East, Development District, Changle County, Shandong, P.R.C.		262400
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including; area code 011 - 86 - 536 - 6295802

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered

Securities registered pursuant to section 12(g) of the Act:

Common Stock

par value $0.001

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Ye s þ No

Indicate by check mark if the registrant is no t required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Y e s þ No

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and smaller reporting companies in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ Do not check if a smaller reporting company	Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes þ No

The aggregate market value of the voting and no n -voting common equity held by non-affiliates* (8,041,780 shares of common s tock) computed by reference to the price of $3.16 per share of common stock at which the common equity was last sold on December 31, 2007, the last day of our most recently completed second fiscal quarter, as reported on www.yahoo.com was: $25,412,025.

* Excludes common stock held by executive officers, directors and stockholders whose individual ownership exceeds 10 % of common stock outstanding on June 30, 2008.

There were 19 ,094,805 shares of Common Stock, p ar value $0.001, issued and outstanding as of September 24, 2008.

DOCUMENTS INCORPORATED BY REFERENCE

List here under the following documents if incorporated by reference and the Part of the Form 1 0 -K (e.g., Part I, Part II, etc.) in t o which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).

None.

EXPLANATORY NOTE

The purpose of this Amendment No.1 to the Annual Report on Form 10-K is to respond to the SEC comments which requested that we amend certain disclosures regarding our internal control, management’s disclosure and analysis, consolidated statements of cash flows, notes to the consolidated financial statements, risk factors and other sections. This Amendment does not modify or update disclosures in the original 10-K affected by subsequent events.

PART I

Item 1. Business.

This Annual Report on Form 10-K (including the section regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this Annual Report on Form 10-K reflect our good faith judgment, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed in Item 1A—“Risks Factors” below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the SEC. We make available on our web site under “Investor Relations/SEC Filings,” free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such materials with or furnish them to the SEC. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site ( www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

All references to “us,” “we,” the “Company” and “Shengtai” refer to Shengtai Pharmaceutical, Inc., and its subsidiaries, Weifang Shengtai Pharmaceutical Co., Ltd., a wholly foreign owned entity in the PRC (“Weifang Shengtai”) and Shengtai Holding Inc., a New Jersey Corporation. All references to “China” or the “PRC” refer to the People’s Republic of China.

Overview

We are through our wholly-owned subsidiary, Weifang Shengtai, a PRC-based company, a leading manufacturer and supplier of glucose products in the PRC. Our products include pharmaceutical grade glucose used for medical purposes, and glucose and starch products for the food and beverage industry, and for industrial production. Most of our sales are made domestically in the PRC.

Dextrose (a form of glucose) is one of the most important carbohydrates and the chief source of energy in the human body. As such, dextrose monohydrate is used in a wide array of pharmaceutical products such as transfusions and intravenous drips for restorative and nutritional purposes. (Source: A survey by the China Starch Industry Association.) (Source: An extract from “China’s Starch, Modified Starch and Crystallized Glucose Production Summary, 2006 edition”, published in July 2007 by the China Starch Industry Association).

Approximately 38.0% of our revenues for the fiscal year ended June 30, 2008, were attributable to sales of glucose products.

Approximately 31.7% of our sales revenues for the fiscal year ended June 30, 2008, were attributable to sales of starch products.

In addition to our pharmaceutical glucose series of products, we also produce the other medicinal product lines described below and glucose and starch products such as industrial glucose, starch, avermectins, and dextrin, which are used for food, beverage and industrial production .

We believe that the global market for pharmaceutical grade glucose (dextrose) is growing and is likely to continue to grow.

In the PRC alone, from 2002 to 2004, the annual demand for glucose has increased from approximately 250,000 tons to 800,000 tons per year, and the annual demand for glucose is expected to increase to 1.7 million tons per year by 2009 (Source: An extract from “Analysis on Present Situation and Prospect of Chinese Starch Sugar Industry” published by Starch and Sugar , Volume I of 2007).

Our Products

We manufacture two categories of products (i) pharmaceutical and medicinal grade products and (ii) raw materials for the food and beverage processing industries.

Pharmaceutical and medicinal grade products:

These products accounted for 32.6% of our sales for the fiscal year ended June 30, 2008. Set forth below is a list of our major pharmaceutical and medical grade products:

Dextrose Monohydrate Transfusion (25kg/bag)

Dextrose Anhydrous (25kg/bag)

Dextrin (25kg/bag)

Pharmace utical Grade Cornstarch (25kg/bag)

Raw Materials for the Food and Beverage and Processing Industries:

We produce the following raw materials for the food and beverage and processing industries:

Industrial Glucose (25kg/bag,40kg/bag,500kg/bag)

Dextrose Monohydrate Oral (25kg/bag)

Food and Beverage Grade Cornstarch (25kg/bag, 500kg/bag)

Fibers (25kg/bag,30kg/bag)

Corn Embryo(30kg/bag)

Protein Powders(50kg/bag)

Phytin (Block)

Other Products

At the end of June 2007, we set up a new product line to manufacture sodium gluconate. This non-corrosive, non-toxic and highly pure gluconate is gaining popularity as a chelating agent in the PRC and is widely used in pharmaceutical, construction and chemistry industries. However, we temporarily discontinued this product line in May 2008 because we did not achieve economies of scale for this product and we wanted to focus our limited resources on our main product lines. We plan to recover the production when the market is more profitable and when we have more resources to allow such operations. Currently, we estimate the production will be recovered in a larger scale in the year ending June 30, 2010.

Sales of Products by Type and Geographic Locations

Approximately 89.3% of our revenues for the fiscal year ended June 30, 2008 were attributable to domestic sales made in the PRC.Set forth below is a breakdown of the principal products sold by us in different geographic locations over the previous three fiscal years and the revenues from such sales.

Sales by Product Dextrose Monohydrate (DMH)	FY 06/30/2006 (Revenue) $		% of Total	FY 06/30/2007 (Revenue) $		% of Total	FY 06/30/2008 (Revenue) $		% of Total
Domestic		9,474,787.00	26.70		14,110,347.00	27.00		15,895,933.82	17.49
International		1,363,569.00	3.90		1,516,334.00	2.90		1,399,039.25	1.54
Dextrose Anhydrous
Domestic		762,238.00	2.20		1,409,117.00	2.70		3,801,014.49	4.18
International		534,253.00	1.40		1,009,844.00	1.90		3,376,338.41	3.72
Dextrose Monohydrate Oral
Domestic		17,123,772.00	47.50		11,398,510.00	22.00		2,974,842.00	3.30
International		2,431,263.00	6.70		2,553,863.00	4.90		4,341,758.00	4.80
Pharmaceutical Grade Cornstarch
Domestic		768,148.00	2.10		1,845,796.00	3.60		2,579,995.00	2.80
International		1,685.00	0.01		8,436.00	0.02		236,814.00	0.30

Sales and Marketing

Sales are carried out directly by our sales department and we are not dependent on distributors or middlemen. As of June 30, 2008, all the provinces except Tibet in the mainland PRC have been covered by our domestic sales network. We have established representative offices in 4 cities (Chengdu, Hangzhou, Nanchang, and Guangzhou) to fortify our domestic sales network. We believe that these offices help us to better interact with our customers, reinforce our sales force, and improve our corporate image. We export our products to customers to over seventy countries, and we plan to increase our global sales.

In July, 2008, we restructured our sales department to better serve our customers and better accommodate expansion. We hired additional sales staff and subdivided the sales department into five separate sales departments, four of which represent different product lines: monohydrate glucose, anhydrous glucose, dextrose anhydrate oral and corn starch. Our fifth sales department focuses on sales outside of the PRC.

Delivery Methods

We utilize the following delivery methods: ground transportation, shipment by sea and by rail. Products sold internationally are shipped by sea. Approximately 89.3% of our products are delivered by ground transportation. We generally bear the costs and risks of transportation unless a customer specifies another mode of delivery.

The Glucose Production Process

Our glucose is made from enzyme-converted cornstarch. The glucose that we produce has the following characteristics: low heat, endotoxin in bacteria lower than 0.125Eu/ml, high purity, and a production standard of lower than 0.06Eu/ml.

The steps required to produce glucose from cornstarch are:

The cornstarch is converted into an emulsion;

Alpha-Amylase Glucoamylase is added;

The emulsion from the chemical reaction from the combination of the two above is cleaned and dried after filteri ng, discoloring, ion exchange, inspissation, crystallization and separation; and

The cleaned and dried end-product of the above process is glucose

Under normal operating conditions, the finished product rate is 100%, with no rejects and wasted products. In case of a power outage or equipment malfunction, sub-standard output is detected by our quality control procedures, and is placed back into the production process for re- processing.

Major Suppliers

The three principal ingredients for glucose production are cornstarch, enzyme preparations, and active carbon. The major suppliers for these raw materials are as follows:

Cornstarch

Cornstarch Manufacturing Facility

Last year we completed the construction of a new cornstarch production complex with an annual production capacity of 240,000 tons, which can be expanded to 300,000 tons per year, if necessary. The complex is close to our existing glucose production plant. It started producing cornstarch in January, 2007.

During fiscal year 2008, approximately 37.13% of the new cornstarch production plant’s output was used as raw materials for glucose production, and the other 62.87% was sold to customers in the food and beverage, pharmaceutical and industrial industries.

Our cornstarch production complex consists of the following areas:

Corn storage

Cornstarch production line

Warehouse for finished product (cornstarch)

Logistical and delivery coordination center

Environmentally friendly waste water tr eatment facilities

Our new cornstarch production has the following benefits:

Low-cost and stable supply of high-quality raw materials for glucose production

The stable supply of cornstarch will enable our existing glucose production pla nt to operate at full capacity

Reduced transportation costs of raw materials

Quality assurance of cornstarch since we are producing our own cornstarch

Enzyme Preparations

We purchased a total of 278 tons of enzyme preparations from our sole supplier, Novozymes (China) Biotechnology Co. Ltd., during the previous three fiscal years. Although we have not purchased enzyme preparations from any other source, there are a number of other suppliers from whom we can make purchases, if necessary.

Active Carbon

We believe that Fujian Sha County Qingshan Chemical Carbon Corporation is one of the major active carbon producers in the PRC. We purchased a total of 3,327 tons of active carbon from it over the past three fiscal years. There are a number of other suppliers of active carbon from whom we can make purchases, if necessary.

We are not dependent on any one supplier of raw materials and machinery, nor have we ever experienced a shortage of supply of raw materials or machinery.

New Glucose Manufacturing Facility

In July 2008, we completed construction of a new glucose manufacturing facility to boost our production capacity and at the end of September, 2008, the facility passed its GMP inspection. The facility has a production capacity of 120,000 tons, and with our pre-existing facility, we can produce a total of 180,000 tons (we can increase capacity in the old facility by 30,000 tons, if necessary, for a total of 210,000 tons). The final cost was approximately $32 million, out of which the building accounted for approximately $10 million and machinery and equipment approximately $22 million.. We are commencing start up operations in the new facility in stages with small amounts first and building up to larger quantities.

Quality Control

Our PRC production facilities are fully certified by applicable PRC regulations for GMP, ISO9002 and HACCP international quality standards. The rate of quality output (output conforming to pharmaceutical-grade glucose product specifications) is maintained at 100% because non- conforming products can be reprocessed.

A three-tier quality control system (production team level, workshop level, and management accountability for quality) ensures that all products are produced in a pollution-free, contamination-free and efficient production environment following strict quality-oriented procedures:

A team of workers on-duty is responsible for the smooth operation of the production process by adhering to proper procedures. The intermediate output from each production step is sampled and checked to ensure that the final output is of specified quality standards.

Equipment is checked regularly and maintained to ensure proper operation. The quality of the water used in the production process i s regularly checked as well. The level of airborne particles and microbes in the production sites is regularly checked to eliminate contamination.

The quality of all output is reviewed by the General Manager of the Quality Control Department, and ultimately approved by the CEO. A full set of written quality control records is maintained.

The qualities of our manufactured glucose can be summarized as follows:

Properties : white crystal, granular powder, odorless, sweet taste, easy soluble in water, slightly soluble in alcohol

Specific rotatory power : +52.0 degrees— +53.5degrees

Dry loss : ≤9.5% Chloride: <0.02% Sulfate: <0.02%

Alcohol - insoluble matter: ≤5mg

Ferrous salt: <0.002% Ignition residue: 0.08% Heavy metal: ≤20ppm Arsenide: <2ppm

Sulfite and soluble starch: appear yellow when added to an iodine test solution.

The qualities of our Dextrose Monohydrate Transfusion (liquid glucose) may be summarized as follows: Perceptual index:

Appearance: colorless without the impurity that can be seen by the naked eye

Odor: no unusual odor

Taste: Clear sweet

Physical and chemical index S olid substance: more than 84% DE: 38-42

PH: 4.6 -6.0

Maltose content: 8% - 20% Transmittance (426nm): more than 94

Coke Temperature: more than or equal to 125

Ash: no more than 0.3%

Hygienic index:

As: not more than 0.5mg/Kg

Pb: not more than 0.5mg/Kg

Bacterium total: not more than 1,000/g E. coli: not more than 30/100g Pathogen: No

Market Analysis

Industry Overview and Trends

The pharmaceutical transfusion was first put to use in 1832. Since then clinical transfusion has grown from its rather limited choice of original physiological brine to more than 200 different kinds of transfusion media.

The diverse range of transfusion media can be grouped into five categories:

Body fluid balance (Isohydria)

Nutritional transfusion

Dialyzate

Plasma expander

Therapeutic transfusion (including herbal transfusion)

Dextrose Monohydrate is widely used in the medical and clinical environment for restorative and nutritional purposes. For example, a solution of pure glucose (Dextrose or D-glucose) has been recommended for use by subcutaneous injection as a restorative measure after major operations or as a nutritive measure in debilitating diseases.

Dextrose Monohydrate is widely used in hospitals and clinical institutions in the PRC and is covered by the PRC Government-subsidized Medical Insurance Scheme.

Glucose exists in many forms in nature, including in plants, fruits, honey and animal products. In humans, every 100ml of blood typically contains 80-120 mg glucose. Glucose is the ingredient for many saccharide compounds such as saccharose, maltose, starch, glycogen and vitamins. The properties of glucose are summarized as: white crystal with sweet taste, easily soluble in water, difficult to dissolve in alcohol, insoluble in organic solvents such as ether, chloroform and neutral reaction to litmus.

Liquid glucose is a transparent and viscous liquid, and is produced by the action of enzymes on refined cornstarch. Glucose is formed by the hydrolysis of many carbohydrates, including sucrose, maltose, cellulose, starch and glycogen. Fermentation of glucose by yeast produces ethyl alcohol and carbon dioxide. Glucose is made industrially by the hydrolysis of starch under the influence of diluted aid, or more commonly, under that of enzymes.

Glucose is used for many different purposes, as a raw material for many food and beverage products and as a substitute for sucrose. With the technological advances in food and beverage production, and as also in response to the demand from consumers for healthier food and drinks, producers are using more and more glucose as a raw material. Glucose is also used in veterinary medicine as a carrier of animal medicines.

Glucose is used by the pharmaceutical and chemical industries in a variety of ways. By using different reaction mechanisms, different types of chemical compounds are produced, using the self-oxidation and combination mechanism to produce calcium gluconate, zinc gluconate, and glucorone; using the hydro-reduction mechanism to produce sorbic alcohol and manno-alcohol, or to produce Vitamin B2, glutamine, ribose, and other vitamins.

World Pharmaceutical Market

The global market for pharmaceutical products is growing at a significant rate and is projected to continue to do so in the immediate future. Pharmaceutical Market Trends, 2006-2010 by BioPortfolio forecast an increase in the global pharmaceutical market to $842 billion in 2010. IMS Health estimates the global pharmaceutical market at $712 in 2007. It estimates global market growth in 2007 at 6.4% with 13.3% in Asia, including 25.7% in China. IMS Media Advisory April 16, 2008. In its 2008 forecast, IMS identifies the following key market dynamics: The seven markets of China, Brazil, Mexico, South Korea, India, Turkey and Russia are expected to grow 12 - 13 percent in 2008. “In these markets, there is significantly greater access both to generic and innovative new medicines as primary care improves and becomes more available in rural areas, and as private health insurance becomes more commonly held.” IMS Health's 2008 Global Pharmaceutical Market and Therapy Forecast November 1, 2007.

The Pharmaceutical Business Review reported, “ Positive econo mic growth, stabilizing political structures, growing patient populations, and increasing direct foreign investment in the emerging markets of Brazil, Russia, India and China (BRIC) are creating significant opportunities for pharmaceutical companies to ex p and into these markets and maximize future revenue potential. Pharmaceutical sales across the BRIC economies grew by 22.3% in 2005, compared to single digit growth in the major markets of the US, Europe and Japan. ”

According to IMS, a leading forecast provider of market intelligence to the pharmaceutical and healthcare industries, 2007 total global pharmaceutical sales grew 6.4% at constant exchange rates, to $712 billion. In the top ten major markets, audited growth was 5.1% in 2007. IMS audits covers 95% of the market, while the remaining 5% are estimates.

The PRC Pharmaceutical Market

With annual growth rates in the PRC pharmaceutical industry exceeding 15% per year, the PRC has become a critically important market (see “China’s Pharmaceutical Market is World’s Ninth Largest,” October 22, 2005, available on www.100md.com). Our expectation of similar growth rate also comes from a demographic analysis. The PRC has the most aged citizens in the world. In 2004, it had 143 million people aged 60 and above. This number will be 200 million in 2014 and 300 million in 2026. (See article titled “China’s ageing problem and seven features”, dated February 24, 2006, available on www.china.org.cn). We believe that an aging population will necessarily call for the demand of more pharmaceutical and medicinal products to meet its needs. Demand for better drugs and medical equipment is driving this market. We believe it will continue to grow as the country modernizes and provides healthcare to a population of 1.3 billion people. Currently, the population of the PRC is served by approximately 310,000 medical and clinical institutions.

The PRC is one of the top 10 emerging pharmaceutical markets of the world, and is the second largest market in Asia after Japan as reported in an article dated May 6, 2005, titled “Experts Forecast China will become the World’s Fifth Biggest Medicine Market in 2010” on the Chinese Small- Medium Enterprises web site (http://www.ynetc.gov.cn/Art icle_Show.asp?ArticleID=387 ). By 2010, it is believed the PRC will become the world’s fifth largest pharmaceutical market after the USA, Japan, Germany, and France according to a report dated November 13, 2002 titled “Asia Pacific Medical Industrial Council Forecasts China will become the World’s Fifth Largest Pharmaceutical Market by 2010” on People’s Web site (www.people.com.cn). It is projected that the PRC pharmaceutical market would be valued at $75 billion by 2010, accounting for 10% of global demand, and $120 billion by 2020 (Source: www.http://managert.bokee.com/4173614.html).

The value of PRC pharmaceutical goods produced in 1970 was only $21.7 billion. (as reported on the Szechuan News Web site, www.newssc.org, in an article titled “Discussion on the Development and State of China’s Pharmaceutical Industry”). Currently the PRC pharmaceutical market produces goods with a value of over $54.6 billion, according to an article in the July/August 2006 edition of the magazine Pharmaceutical Manufacturing. The PRC produces a little less than 25% of what is produced by the U.S. pharmaceutical market, which is valued at web site (www.yd210.com)).

We believe that the global demand for pharmaceuticals is likely to continue to increase, with developing countries now being economically more prosperous and capable of spending more money on improving healthcare.

Major Import and Export Markets for Pharmaceutical Products

The major producers of chemical pharmaceutical raw materials are Western Europe, North America, Japan, China and India. Western Europe is a net exporter with 50% of its total production being exported. North America is a major importer, with its own products only able to satisfy 20% of its total demand. Japan is believed to be evolving to become a net importer. The PRC and India have emerged into two major exporters for pharmaceutical raw materials, exporting 30-40% of its total output. (Source: Article titled “2002-2003 Analysis of the World’s Pharmaceutical Market” as reported on the Shanghai Information Services Platform web site, http://www.istis.sh.cn/)

The total annual chemical drug-base production of the PRC is approximately 500,000 tons, consisting of raw materials for the production of anti-biotic, vitamins, pain-killers and hormonal and other drugs, and is second only to United States. The PRC and India are emerging as the major exporters in these product and raw material categories.

The Pharmaceutical Raw Materials Manufacturing Industry in the PRC

The PRC, as a country, has put a lot of emphasis on the production of pharmaceutical raw materials in the past 40-50 years. Additionally, in the past ten years, a number of large international pharmaceutical companies have moved their productions to the PRC, such as Cargill, CPI and Roquette. Both factors have contributed to the growth of this specific segment in the PRC.

This industry segment can be categorized into three groups: first, the state-owned or government-subsidized pharmaceutical companies taking up 30% of market share; second, the foreign-owned or Sino-foreign Joint ventures taking up 60% of market share, and with the bulk of smaller firms competing for the remaining 10%. We fall into the second category.

Market Analysis and Projections for Clinical Transfusion Products in the PRC

Transfusion solutions are one of most commonly used clinical prescriptions in hospitals and healthcare institutions. Dextrose Monohydrate is one of the five most important types of medical prescriptions in the PRC and is one of the most widely used pharmaceutical products.

The total production volume of transfusion solutions grew from 1.38 billion bottles in 1995 to 2.91 billion bottles in 2001, i.e. annual growth of around 16.1% (source: http://www.chinapharm.com.en/html/scfx/20034815219.html). The types of transfusion solutions grew from 40 to more than 80 types of medical transfusion formulations.

There are more than 200 types of transfusion solutions developed and used in overseas countries, and the annual per capital consumption is more than 3 bottles. The PRC has only approximately 50 types of transfusion products, and the per capital consumption is around 2.15 bottles. Most of the consumption is for Dextrose Monohydrate. (Source: Report titled “Major Transportation of Liquid Pharmaceutical Products: Entering the Speedway” dated April 21, 2003 published on Chinapharm web site, www.chinapharm.com.cn)

We believe that we are one of the top producers of Dextrose Monohydrate transfusion solutions as well as Dextrose Anhydrous solutions. These products are the raw materials or base solutions for pharmaceutical manufacturers to add specific medical formulations to produce medicated transfusion. Our industrial customers are producers of medical transfusion solutions.

The growth in demand for Dextrose Monohydrate transfusion solutions is co-related to the growth of the pharmaceutical production and consumption trends and patterns. Medical transfusion is a common and well-accepted treatment routine all over the PRC for many ailments, ranging from the common cold, influenza, and intestinal disorders to clinical restorative or recuperative prescriptions after surgical operations. There are altogether 310,000 medical service providers such as hospitals, clinics, and health-care institutions serving the 1.3 billion people in the PRC.

Based on our analysis of the consumption of glucose products carried out by the China Starch Industry Association and the disposable income per capita from China National Statistics Bureau, we believe that there is a strong correlation between the consumption of glucose products and the disposable income per capita.

We predict that higher living standards would lead to higher consumption of pharmaceutical dextrose. It is our understanding that the robust and continuing economic growth, the rising purchasing power of the domestic market, as well as the public awareness of quality healthcare products, are all drivers to the demand for our products. The strong growth in the PRC pharmaceutical industry will also help increase the selling prices of our major products, and enhance our revenues and increase our gross profit margin.

Target Market

Our principal customers are:

Healthcare Institutions

Medical supply companies

Physician offices

Pharmaceutical companies

Medica l supply exporters

Food and beverage companies

We market our products to these types of businesses within the PRC and plan to expand our export business as we increase our production capabilities, particularly in wholesale sales to foreign distributors.

We utilize the following factors/incentives to encourage the purchase of our products:

High quality, pharmaceutical grade products

Certified product reliability

On-time deliveries

New and improved medicina l products and packaging

Excellent service and support

Excellent referrals

Domestic and International Market

The market in the PRC for our products is very large and growing rapidly. There are more than 310,000 medical service providers such as hospitals and healthcare institutions all over the PRC.

We believe that the export market is a lucrative market that we plan to further develop and expand. Due to the strong domestic demand for our products and our prior production constraints, we are able to only serve a fraction of the export market.

Our export revenues for the Dextrose Monohydrate series of products (which also includes anhydrous glucose and oral glucose) derived from our top four export markets are summarized as follows:

South Korea

Import approval permit issued in 2003

Products exported: Dextrose Monohydrate Oral and Dextrose Anhydrous

	FY2006		FY2007				FY2008
$	370,467		$	548,172			$	3,103,805

Russia

Import approval permit issued in 2004

Products exported: Dextrose Monohydrate Oral, Dextrose Monohydrate transfusion

	FY2006		FY2007				FY2008
$	258,115		$	1,006,133			$	1,248,805

Australia

Import approval permit issued in 2003

Product exported: Dextrose Monohydrate Oral

	FY2006		FY2007				FY2008
$	278,202		$	813,746			$	433,312.6

Singapore (plus re-export to Thailand)

Import approval permit issued in 2003

Products exported: Dextrose Monohydrate Injection

	FY2006		FY2007				FY2008
$	28,285		$	29,345			$	60,573

Competition

Some of our competitors of its main products are listed below. They are coded as follows:

(trans = competitor in Dextrose Monohydrate transfusion solution)

(oral = competitor in oral Dextrose Monohydrate)

(andh = competitor in Dextrose Anhydrous)

Dong Ping Rui Xing Petrochemical Company Ltd (trans)

North China Pharmaceutical Production Company Ltd (trans)

Ci Feng Pharmaceutical Production Company Ltd (trans)

•	Yi Kan Pharmaceutical Production Company Ltd (trans)

•	Hebei Shengxue Company Ltd (andh)

•	Northern China Kan Yin Pharmaceutical Product Company Ltd (trans)

•	Shandong Xi Wang Company Ltd (oral)

•	QingHuangDao Lihua Glucose Company Ltd (oral)

•	Hebei Hua Ying Glucose Company Ltd (oral)

•	Cargill USA (trans), (oral)

•	CPI USA (oral) ,(andh)

•	Roquette (trans), (andh)

•	Cerestar (trans), (andh)

•	Hebei Zhou Ping Rui Xue Glucose Company Ltd (andh)

•	Hebei Linhua Glucose and Medicinal Production Company Ltd (andh)

Among our domestic competitors, we believe that we are the largest manufacturer of pharmaceutical grade glucose. Internationally, although our foreign competitors may be better-capitalized, we have significant advantages as follows:

Competitive Advantages

With the PRC being a major corn-producing region of Asia, and Shandong being the major corn-producing province of the PRC, our operating subsidiary Weifang Shengtai, located in Shandong, has the advantage of a steady supply of raw materials, which are located nearby with low transportation costs.

Among our assets is a total of 292,275 square meters of land, of which approximately only 81.29% is being utilized, leaving room for expansion. We have only started to export to markets such as South Korea, Russia, Australia and Singapore and seventy other countries. Taking into consideration the geographical proximity and cross-cultural similarities with the Northern and South-Eastern Asian markets, we believe that we can be competitive in terms of product price, delivery lead-time and customer service responsiveness.

With our new cornstarch facility, the existing glucose manufacturing facility and the new glucose manufacturing facility, we believe that we will be able to stabilize our raw material costs and production, enable our glucose production facility to function at maximum capacity and produce more products for both the domestic and export markets.

We believe that we are one of the leading producers of Dextrose Monohydrate transfusion solution in the PRC, with an estimated 30% of the overall PRC market share (Source: "Compilation of the Means of Production for Starch, Modified Starch, Crystal Glucose and Liquid Starch Sugars in 2005" published by the China Starch Industry Association in July 2006). The other suppliers of Dextrose Monohydrate transfusion solutions have pharmaceutical production lines with a diversified range of medicinal products. We believe that we are the only manufacturer that has our primary focus on producing high-quality Dextrose Monohydrate transfusion solutions in the PRC.

The other competitors are manufacturing companies with a diversified range of industrial glucose and cornstarch products. We believe that most of our competitors put more emphasis on volume production of medium to low value-added products, while we focus more on production of high value-added products.

Backlog

Our orders are processed on a made to order basis and we do not have any backlog of orders.

Growth Initiative

We have developed and are implementing the following initiatives to achieve our goals for growth:

•	Vertical integration of our manufacturing capabilities by building and operating a cornst arch plant.

We believe the cornstarch plant can lower production costs and improve profit margin because higher-quality and lower cost raw materials could be produced in-house and there is no transportation costs because the cornstarch processing plant is next to the glucose production line. This will somewhat shield us from external cornstarch price fluctuation, thus protecting or improving its profit margins.

•	Increase its glucose production capabilities to be able to meet market demand

Overseas demand had not been fully satisfied in the past because our products have been sold out due to strong domestic demand in the PRC. We believe that our 240,000 tons (it can be easily expanded to 300,000 tons) cornstarch processing plant will supply enough raw materials to increase production volumes and sales to an expanding domestic client base and fulfill more overseas orders which offer higher profit margins. In line with this, we commenced construction of our new glucose manufacturing facility, which was completed in July 2008.

•	Expand our marketing and sales efforts to identify and secure additional domestic customers and increase our export sales

We plan to (i) optimize our web site to describe and promote our business, (ii) reorganize sales department, (iii) buy advertisements for various search words and phrases (e.g. "glucose") on Google and Yahoo and major PRC search engines, (iv) conduct seminars at various trade show events to promote our products, and (v) optimize our web site so that people doing ‘natural’ searches will see the web site link on the first page of the search by refining the Search Engine Optimization

Major Customers

Our customers are principally located in the PRC but we hope to expand our international customer base. Our principal customers are hospitals and pharmaceutical companies. Below is a list of our largest PRC customers:

•	Zhejiang Hsin Pharmaceutical Co Ltd

•	Shouguang Tianli Biological Technology Co Ltd

•	Guangdong Weishiya Health Food Co Ltd

•	Lianyungang Roquette Co Ltd

•	Sichuan Kelun Pharmaceutical Co Ltd

•	Beijing Double-Crane Pharmaceutical Co Ltd

•	Huayuan Changfu Pharmaceutical Group

•	Anhui Fengyuan Pharmaceutical Group

•	Huayu Wuxi Pharmaceutical Co Ltd

•	Chengdu Qingshan Pharmaceutical Co Ltd

•	Guangdong Duole Dairy Co Ltd

•	Hong Kong Xiehe Group

•	Redox Australia

•	PBI Thailand

•

SGN Korea

No one customer accounted for more than 10% of our sales for fiscal years ended June 30, 2008, 2007, and 2006.

Intellectual Property

We formally acquired the registered "Heng De Bao" trademark from Changle Medical Starch Factory on or about July 28, 2000. The trademark was assigned by the Chinese Trademark Bureau and registered under classes 31 (pharmaceutical starch and white dextrin) and 5 (pharmaceutical glucose). The class 31 registration is valid through June 10, 2009, while the class 5 registration was renewed and valid till May 9, 2011. International Class Code 5 covers pharmaceuticals, veterinary and sanitary preparations; dietetic substances adapted for medical use; food for babies; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides. International Class Code 31 covers agricultural, horticultural, and forestry products and grains not included in other classes; live animals, fresh fruits and vegetables; seeds, natural plants, and flowers; and malt which is animal food.

Insurance

We purchased automobile insurance with third party liability coverage for our vehicles and life insurance for our key personnel. We do not have other insurance such as property insurance, business liability or disruption insurance coverage for our operations in the PRC. While a lawsuit against a company such as Weifang Shengtai in the PRC would be rare, we cannot make any assurance that we will not have exposure for liability in the event of a lawsuit.

Government Regulations

Because we manufacture medicinal and pharmaceutical products, we are subject to the laws governing the Good Practice in the Manufacturing and Quality Control of Drugs (as amended in 1998) as promulgated by the PRC State Food and Drug Administration on March 18, 1999.

We are also subject to business license and approval regulations that are required for all corporations in the PRC.

We have obtained Certificates of Good Manufacturing Practices for Pharmaceutical Products ("GMP Certificates") issued by the PRC State Food and Drug Administration. The GMP Certificates certify that we have complied with the requirements of Chinese Current Good Manufacturing Practices for Pharmaceutical Products in the manufacture of bulk Dextrose Monohydrate, glucose and anhydrous glucose and the GMP Certificates are valid through May 18, 2009, February 14, 2013, and April 18, 2009, respectively.

Additionally, we have obtained Drug Registration Certificates for glucose and glucose pro oral from the State Food and Drug Administration in accordance with the PRC Medical Products Governance Law and its implementing regulations.

Environmental Compliance

We are subject to PRC environmental laws, rules and regulations that are standard to manufacturing facilities.

All of our production lines including the new glucose production lines have passed inspection by the Environmental Protection Bureau of the PRC and was issued a Certificate of Qualification.

Employees

As of June 30, 2008, we employed approximately 825 full-time employees. Of these, 7 are group administrators, 20 are managers, approximately 45 are in sales, approximately 50 perform administrative functions, and approximately 703 are in production, storage and distribution.

Item 1A. Risk Factors.

Investment in our common stock involves risks. You should carefully consider the risks we describe below before deciding to invest. The market price of our common stock could decline due to any of these risks, in which case you could lose all or part of your investment. In assessing these risks, you should also refer to the other information included in this Annual Report, including our consolidated financial statements and the accompanying notes. You should pay particular attention to the fact that we are a holding company with substantial operations in China and are subject to legal and regulatory environments that in many respects differ from that of the United States. Our business, financial condition or results of operations could be affected materially and adversely by any of the risks discussed below and any others not foreseen. This discussion contains forward-looking statements.

Risks related to doing business in the People’s Republic of China

Our business operations are conducted primarily in the PRC. Because PRC laws, regulations and policies are continually changing, our PRC operations will face several risks summarized below.

Our ability to operate in the PRC may be harmed by changes in its laws and regulations

Our offices and manufacturing plants are located in the PRC and the production, sale and distribution of our products are subject to PRC rules and regulations. In particular, the manufacture and supply of pharmaceutical grade and medicinal products are subject to the PRC rules and regulations, such as the Good Practice in the Manufacturing and Quality Control of Drugs (as amended in 1998) as promulgated by the PRC State Food and Drug Administration on March 18, 1999 and the PRC Medical Products Governance Law. In addition, because we operate a cornstarch production facility which produces waste water, we are subject to the environmental rules and regulations such as the Integrated Wastewater Discharge Standard (GB8978-1996).

The PRC only recently has afforded provincial and local economic autonomy and permitted private economic activities. The PRC government has exercised and continues to exercise substantial control over virtually every sector of the PRC economy through regulation and state ownership.

Our ability to operate in the PRC may be harmed by changes in its laws and regulations, including those relating to manufacturing, taxation, import and export tariffs, environmental regulations, land use rights, property and other matters.

Our production and manufacturing facility is subject to PRC regulation and environmental laws. The PRC government has been active in regulating the pharmaceutical and medicinal goods industry. Our business and products are subject to government regulations mandating the use of good manufacturing practices. Changes in these laws or regulations in the PRC, or other countries we sell into, that govern or apply to our operations could have a materially adverse effect on our business. For example, the law could change so as to prohibit the use of certain chemical agents in our products. If such chemical agents are found in our products, then such a change would reduce our productivity of that product.

We are a state-licensed corporation. If we were to lose our state-licensed status, we would no longer be able to manufacture our products in the PRC.

There is no assurance that PRC economic reforms will not adversely affect our operations in the future

As a developing nation, the PRC's economy is more volatile than that of developed Western industrial economies. It differs significantly from that of the U.S. or a Western European country in such respects as structure, level of development, capital reinvestment, resource allocation and self- sufficiency. Only in recent years has the PRC economy moved from what had been a command economy through the 1970s to one that during the 1990s encouraged substantial private economic activity. Although the PRC government still owns the majority of productive assets in the PRC, in the past several years the government has implemented economic reform measures that emphasize decentralization and encourage private economic activity.

In 1993, the Constitution of the PRC was amended to reinforce such economic reforms. The trends of the 1990s indicate that future policies of the Chinese government will emphasize greater utilization of market forces. The PRC government has confirmed that economic development will follow the model of a market economy. For example, in 1999 the Government announced plans to amend the Chinese Constitution to recognize private property, although private business will officially remain subordinated to the state-owned companies, which are the mainstay of the Chinese economy. However, there can be no assurance that, under some circumstances, the government's pursuit of economic reforms will not be restrained or curtailed. Actions by the central government of the PRC could have a significant adverse effect on economic conditions in the country as a whole and on the economic prospects for our Chinese operations. Economic reforms could either benefit or damage our operations and profitability. Some of the things that could have this effect are: (i) level of government involvement in the economy; (ii) control of foreign exchange; (iii) methods of allocating resources; (iv) international trade restrictions; and (v) international conflict.

Under the present direction, we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and business development in the PRC will follow market forces. While we believe that this trend will continue, there can be no assurance that this will be the case. A change in policies by the PRC government could adversely affect our interests by, among other factors: changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises and could require us to divest ourselves of any interest we then hold in Chinese properties or businesses. Although the PRC government has been pursuing economic reform policies for more than two decades, there is no assurance that the government will continue to pursue these policies or that these policies may not be significantly changed, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting the PRC's political, economic and social life.

Because these economic reform measures may be inconsistent, ineffectual or temporary, there are no assurances that:

•	we will be able to capitalize on economic reforms;

•	the Chinese government will continue its pursuit of economic reform policies;

•	the economic policies, even if pursued, will be successful;

•	economic polic ies will not be significantly altered from time to time; and

•	business operations in the PRC will not become subject to the risk of nationalization.

Anti-inflation measures may be ineffective or harm our ability to do business in the PRC

Since 1979, the PRC government has continued to reform its economic system. Because many reforms are unprecedented or experimental, they are expected to be refined and improved. Other political, economic and social factors, such as political changes, changes in the rates of economic growth, unemployment or inflation, or in the disparities in per capita wealth between regions within the PRC, could lead to further readjustment of the reform measures. This refining and readjustment process may instead negatively affect our operations and there is no guarantee that it will be effective.

Over the last few years, the PRC's economy has registered a high growth rate. During the past ten years, the rate of inflation in the PRC has been as high as 20.7% and as low as -2.2%. Recently, there have been indications that rates of inflation have increased. In response, the PRC government recently has taken measures to curb this excessively expansive economy. These corrective measures were designed to restrict the availability of credit or regulate growth and contain inflation. These measures have included devaluations of the PRC currency, the Renminbi (RMB), restrictions on the availability of domestic credit, reducing the purchasing capability of certain of its customers, and limited re-centralization of the approval process for purchases of some foreign products. These austere measures alone may not succeed in slowing down the economy's excessive expansion or control inflation, and may result in severe dislocations in the PRC economy. The PRC government may adopt additional measures to further combat inflation, including the establishment of freezes or restraints on certain projects or markets. Such measures could harm the market for our products and inhibit our ability to conduct business in the PRC.

The PRC’s legal and judicial system may not adequately protect our business and operations and the rights of foreign investors

The PRC legal and judicial system may negatively impact foreign investors. In 1982, the National People's Congress amended the Constitution of China to authorize foreign investment and guarantee the "lawful rights and interests" of foreign investors in the PRC. However, the PRC's system of laws is not yet comprehensive. The legal and judicial systems in the PRC are still rudimentary, and enforcement of existing laws is inconsistent. Many judges in the PRC lack the depth of legal training and experience that would be expected of a judge in a more developed country. Because the PRC judiciary is relatively inexperienced in enforcing the laws that do exist, anticipation of judicial decision-making is more uncertain than would be expected in a more developed country. It may be impossible to obtain swift and equitable enforcement of laws that do exist, or to obtain enforcement of the judgment of one court by a court of another jurisdiction. The PRC's legal system is based on the civil law regime, that is, it is based on written statutes; a decision by one judge does not set a legal precedent that is required to be followed by judges in other cases. In addition, the interpretation of Chinese laws may be varied to reflect domestic political changes.

The promulgation of new laws, changes to existing laws and the pre-emption of local regulations by national laws may adversely affect foreign investors. However, the trend of legislation over the last 20 years has significantly enhanced the protection of foreign investment and allowed for more control by foreign parties of their investments in PRC enterprises. There can be no assurance that a change in leadership, social or political disruption, or unforeseen circumstances affecting the PRC's political, economic or social life, will not affect the PRC government's ability to continue to support and pursue these reforms. Such a shift could have a material adverse effect on our business and our prospects.

The practical effect of the PRC legal system on our business operations in the PRC can be viewed from two separate but intertwined considerations. First, as a matter of substantive law, the Foreign Invested Enterprise laws provide significant protection from government interference. In addition, these laws guarantee the full enjoyment of the benefits of corporate articles and contracts to Foreign Invested Enterprise participants. These laws, however, do impose standards concerning corporate formation and governance, which are qualitatively different from the general corporation laws of the United States. Similarly, the PRC accounting rules mandate accounting practices, which are not consistent with U.S. generally accepted accounting principles. PRC’s accounting rules require that an annual "statutory audit" be performed in accordance with PRC accounting standards and that the books of accounts of Foreign Invested Enterprises are maintained in accordance with Chinese accounting rules. Article 14 of the People's Republic of China Wholly Foreign-Owned Enterprise Law requires a wholly foreign-owned enterprise to submit certain periodic fiscal reports and statements to designated financial and tax authorities, at the risk of business license revocation. Weifang Shengtai is a wholly foreign-owned enterprise. Second, while the enforcement of substantive rights may appear less clear than United States procedures, the Foreign Invested Enterprises and Wholly Foreign-Owned Enterprises are Chinese registered companies, which enjoy the same status as other Chinese registered companies in business-to-business dispute resolution.

Since the Articles of Association of Weifang Shengtai do not provide for the resolution of disputes the parties are free to proceed to either the Chinese courts, or if they are in agreement, to arbitration.

Any award rendered by an arbitration tribunal is enforceable in accordance with the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). Therefore, as a practical matter, although no assurances can be given, the Chinese legal infrastructure, while different in operation from its United States counterpart, should not present any significant impediment to the operation of Foreign Invested Enterprises.

In addition, some of our present and future executive officers and our directors, most notably, Mr. Qingtai Liu, Mr. Yongqiang Wang, Ms. Yiru Shi, and Mr. Chris Wang, may be residents of the PRC and not of the United States, and substantially all the assets of these persons are located outside the U.S. As a result, it could be difficult for investors to effect service of process in the United States, or to enforce a judgment obtained in the United States against us or any of these persons.

The PRC laws and regulations governing our current business operations are sometimes vague and uncertain. There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to the laws and regulations governing our business, or the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy and criminal proceedings. We and any future subsidiaries are considered foreign persons or foreign funded enterprises under PRC laws, and as a result, we are required to comply with PRC laws and regulations. These laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

Governmental control of currency conversion may affect the value of your investment.

The majority of our revenues will be settled in Renminbi and U.S. dollars, and any future restrictions on currency exchanges may limit our ability to use revenues generated in Renminbi to fund any future business activities outside the PRC or to make dividend or other payments in U.S. dollars. Although the PRC government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises like us may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in the PRC authorized to conduct foreign exchange business.

In addition, conversion of Renminbi for capital account items, including direct investment and loans, is subject to governmental approval in the PRC, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the PRC regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi.

The value of our securities and your ability to receive dividends may be affected by the foreign exchange rates between U.S. dollars and Renminbi and the PRC government’s control over the Renminbi.

The value of our common stock will be affected by the foreign exchange rates between U.S. dollars and Renminbi, and between those currencies and other currencies in which our sales may be denominated. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operational needs and should the Renminbi appreciate against the U.S. dollar at that time, our financial position, our business, and the price of our common stock may be harmed. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar equivalent of our earnings from our subsidiary in the PRC would be reduced.

The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. We receive substantially all of our revenues in Renminbi which is currently not a freely convertible currency. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or otherwise satisfy foreign currency dominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from the transaction, can be made in foreign currencies without prior approval from the PRC State Administration of Foreign Exchange by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of the PRC to pay capital expenses, such as the repayment of bank loans denominated in foreign currencies.

The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay certain expenses as they come due.

The fluctuation of the Renminbi may materially and adversely affect your investment.

The value of the Renminbi against the U.S. Dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC's political and economic conditions. As we rely almost entirely on revenues earned in the PRC—most of our sales occur in the PRC—any significant revaluation of the Renminbi may materially and adversely affect our cash flows, revenues and financial condition. For example, to the extent that we need to convert U.S. Dollars we receive from an offering of our securities into Renminbi for our operations, appreciation of the Renminbi against the U.S. Dollar could have a material adverse effect on our business, financial condition and results of operations. Conversely, if we decide to convert our Renminbi into U.S. Dollars for the purpose of making payments for dividends on our common shares or for other business purposes and the U.S. Dollar appreciates against the Renminbi, the U.S. Dollar equivalent of the Renminbi we convert would be reduced. In addition, the depreciation of significant U.S. Dollar denominated assets could result in a charge to our income statement and a reduction in the value of these assets.

On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. Dollar. Under the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in appreciation of the Renminbi against the U.S. Dollar. While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant appreciation of the Renminbi against the U.S. Dollar.

Recent PRC regulations relating to the establishment of offshore special purpose companies by PRC domestic residents and registration requirements for employee stock ownership plans or share option plans may subject our PRC resident beneficial owners or the plan participants to personal liability, limit our ability to inject capital into our PRC subsidiaries, limit our subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

The China State Administration of Foreign Exchange ("SAFE") issued a public notice in October 2005 requiring PRC domestic residents to register with the local SAFE branch before establishing or controlling any company outside of China for the purpose of capital financing with assets or equities of PRC companies, referred to in the notice as an "offshore special purpose company." PRC domestic residents who are shareholders of offshore special purpose companies and have completed round trip investments but did not make foreign exchange registrations for overseas investments before November 1, 2005 were retroactively required to register with the local SAFE branch before March 31, 2006. PRC resident shareholders are also required to amend their registrations with the local SAFE in certain circumstances. After consultation with China counsel, we do not believe that any of our PRC domestic resident shareholders are subject to the SAFE registration requirement, however, we cannot provide any assurances that all of our shareholders who are PRC residents will not be required to make or obtain any applicable registrations or approvals required by these SAFE regulations in the future. The failure or inability of our PRC resident shareholders to comply with the registration procedures set forth therein may subject us to fines and legal sanctions, restrict our cross-border investment activities, or limit our PRC subsidiaries’ ability to distribute dividends or obtain foreign-exchange-dominated loans to our company.

As it is uncertain how the SAFE regulations will be interpreted or implemented, we cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject to more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our results of operations and financial condition. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the SAFE regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

In December 2006, the People’s Bank of China promulgated the Implementation Rules of the Administrative Measures for Individual Foreign Exchange, or the Individual Foreign Exchange Rules, setting forth the respective requirements for foreign exchange transactions by PRC individuals under either the current account or the capital account. In January 2007, SAFE issued implementing rules for the Individual Foreign Exchange Rules, which, among other things, specified approval requirements for certain capital account transactions such as a PRC citizen’s participation in the employee stock ownership plans or stock option plans of an overseas publicly-listed company. On March 28, 2007, SAFE promulgated the Application Procedure of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Holding Plan or Stock Option Plan of Overseas-Listed Company, or the Stock Option Rule. Under the Stock Option Rule, PRC citizens who are granted stock options by an overseas publicly-listed company are required, through a PRC agent or PRC subsidiary of such overseas publicly-listed company, to register with SAFE and complete certain other procedures. We and our PRC employees who may be granted stock options are subject to the Stock Option Rule. If we or our PRC optionees fail to comply with these regulations, we or our PRC optionees may be subject to fines and legal sanctions.

The new provisions of the PRC Employment Contract Law may substantially increase our labor-related costs in the future.

The PRC Employment Contract Law, which became effective as of January 1, 2008, contains many more provisions favorable to employees than existing labor regulations in effect in China. This may substantially increase our labor-related costs in our future operations. According to the new law, an employee is entitled to terminate his or her employment relationship with his or her employer for certain causes, such as delay in payment of wages or social insurance contribution or dissatisfactory labor protection, and under such circumstances the employer is liable to pay compensation to the employee. The amount of such compensation payment shall be one month's salary for each year that the employee has served the employer, subject to a cap of twelve months' salary. An employer shall also be liable to compensate an employee when the employer decides not to renew an existing employment contract that is about to expire, unless the employee refuses to renew the employment contract even though the employer offers equal or more favorable terms than those in the existing employment contract. In addition, an employer is obligated to conclude an open-ended employment contract with an employee after two consecutive terms of fixed-term employment, which means the employer will be liable to pay damages to an employee if it terminates this employee without cause, until the employee reaches an age at which he or she is eligible for pension payment. We may have greater difficulty terminating underperforming employees and may incur higher levels of labor costs in order to comply with the provisions of the new law, which may have a material adverse effect on our business, financial condition and operating results.

Risks related to our business

We cannot give any assurance that any plans for future expansion will be implemented or that they will be successful.

While we have expansion plans, which include making full use of the newly built cornstarch manufacturing plant (partially completed and operational since January 2007), upgrading our existing glucose manufacturing facility, building a new glucose manufacturing facility and expanding our sales overseas, there is no guarantee that such plans will be implemented or that they will be successful. These plans are subject to, among other things, their feasibility to meet the challenges we face, our ability to arrange for sufficient funding and the ability to hire qualified and capable employees to carry out these expansion plans.

We have a limited operating history and limited historical financial information upon which you may evaluate our performance.

Our operating subsidiary, Weifang Shengtai, was incorporated in 1999 and our operations have been largely confined to the PRC. In addition, while we have had some experience in managing a cornstarch manufacturing facility, we may not be adequately prepared to manage and operate a larger, more modern facility.

We are in our early stages of development and face risks associated with a new company in a growth industry. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment. Even if we accomplish these objectives, we may not generate positive cash flows or the profits we anticipate in the future.

Although our revenues have grown rapidly since our inception from the growing demand for our glucose products, we cannot assure you that we will maintain our profitability or that we will not incur net losses in the future. We expect that our operating expenses will increase as we expand. Any significant failure to realize anticipated revenue growth could result in significant operating losses. We will continue to encounter risks and difficulties frequently experienced by companies at a similar stage of development, including our potential failure to:

•

expand our product offerings and maintain the high quality of our products;

•

manage our expanding operations, including the integration of any future acquisitions;

•

obtain sufficient working capital to support our expansion and to fill customers' orders in time;

•

maintain adequate control of our expenses;

•

implement our product development, marketing, sales, and acquisition strategies and adapt and modify them as needed; and

•

anticipate and adapt to changing conditions in the dextrose monohydrate and glucose products markets in which we operate as well as the impact of any changes in government regulation, mergers and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics.

We may have difficulty establishing adequate management, legal and financial controls in the PRC, and such difficulties could reduce the value of any investment in our common stock.

The PRC historically has not adopted a western style of management and financial reporting concepts and practices, or a modern western style of banking, computer and other control systems. We may have difficulty in hiring and retaining a sufficient number of employees qualified in these areas to work for our operating company in the PRC. As a result of these factors, we have had, and may continue to have difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices relating to our PRC operations that meet Western standards.

We have recently discovered material weaknesses in our internal control over financial reporting and cannot assure you that additional material weaknesses will not be identified in the future. We concluded that our internal control over financial reporting and disclosure controls and procedures are not effective, although we believe that the financial statements included in our past filings correctly present our financial condition, results of operations and cash flows for the fiscal years covered thereby in all material respects. Accordingly in the future there may be errors in our financial statements that could require a restatement or our filings may not be timely and investors may lose confidence in our reported financial information, which could lead to a decline in our stock price.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness; yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.

Material weaknesses related to:

• Accounting and Finance Personnel Weaknesses - US GAAP expertise - The current staff in the accounting department is relatively new and inexperienced, and needs substantial training so as to meet with the higher demands of being a U.S. public company. The accounting skills and understanding necessary to fulfill the requirements of U.S. GAAP-based reporting, including the skills of subsidiary financial statements consolidation, are inadequate and were inadequately supervised.

• Lack of internal audit function - The Company lacks qualified resources to perform the internal audit functions properly. In addition, the scope and effectiveness of the internal audit function are yet to be developed.

The steps we have taken to remediate these weaknesses include the following:

1. In May 2008, we engaged Ms. Yiru Shi, a CPA with experience as an independent auditor as well as financial experience at Sun Microsystems and Hewlett Packard, to serve as our chief financial officer. Ms. Yiru Shi has extensive experience in internal control and U.S. GAAP reporting compliance and an MBA from the University of California-Irvine and together with our chief executive officer will oversee and manage our the financial reporting process and required training of the accounting staff.

2. In July, 2008 we engaged independent consultants to assist the Company in improving the internal control system based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. The consultants are currently in the process of conducting an evaluation of our internal control over financial reporting, and designing and implementing enhanced processes and procedures to improve our internal control over financial reporting.

3. We plan to train our internal accountants well in U.S. GAAP principles and reporting. Although our accounting staff is professional and experienced in accounting requirements and procedures generally accepted in the PRC, management has determined that they require additional training and assistance in U.S. GAAP matters.

4. We are also planning to establish an internal audit unit to establish effective internal control. We plan to allocate sufficient resources to achieve an effective internal audit function.

5. We plan to recruit and train additional accounting personnel with experience in U.S. GAAP.

We plan for the above policy to be consistently followed, which we hope will provide for much greater credibility and consistency in the financial statements.

However, as a result of these material weaknesses and deficiencies in our disclosure controls and procedures, current and potential stockholders could lose confidence in our financial reporting and disclosures made in our public filings, which would harm our business and the trading price of our stock.

Standards for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 are uncertain, and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting, and attestation of this assessment by our company's independent registered public accountants. The SEC extended the compliance dates for non-accelerated filers like us. Accordingly, the annual assessment of our internal controls first applied to our annual report for the 2009 fiscal year and the attestation requirement of management's assessment by independent registered public accountants will first apply to our annual report for the 2010 fiscal year. The standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. In addition, the attestation process by our independent registered public accountants is new and we may encounter problems or delays in the future in completing the implementation of any requested improvements and receiving an attestation of our assessment by our independent registered public accountants. Since we cannot assess our internal control over financial reporting as effective, and our independent registered public accountants are unlikely to be able to provide an unqualified attestation report, investor confidence and share value may be negatively impacted.

We face stiff competition, some of which may be from companies which may be better capitalized and more experienced than us.

We face competition from other domestic and global manufacturers and suppliers of pharmaceutical grade dextrose monohydrate and glucose. Although we view ourselves in a favorable position vis-à-vis our competition, some of the other companies that sell into our markets may be more successful than us and/or have more experience and financial resources than we do. This additional experience and financial backing may enable our competitors to produce more cost-effective products and market their products with more success than we are able to, which would decrease our sales. We expect that we will be required to continue to invest in product development and productivity improvements to compete effectively in our markets. However, we cannot assure you that we can successfully remain competitive. If our competitors develop a more efficient product or undertake more aggressive and costly marketing campaigns than us, this could have a material adverse effect on our business, results of operations or financial condition.

A slowdown in the PRC economy may adversely affect our operations.

As all of our operations are conducted in the PRC and most of our revenues are generated from sales in the PRC, a slowdown or other adverse developments in the PRC economy could materially and adversely affect our customers, demand for our products, and our business. Although the PRC economy has grown significantly in recent years, we cannot assure you that such growth will continue. While we believe the demand for our products is not dependent on the health of the economy, we do not know how sensitive we are to a slowdown in economic growth or other adverse changes in the PRC economy. A slowdown in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially reduce the demand for our products and materially and adversely affect our business.

Our major competitors may be better able than us to successfully endure downturns in our sector. In periods of reduced demand for our products, we can either choose to maintain market share by reducing our selling prices to meet competition or maintain selling prices, which would likely sacrifice market share. Sales and overall profitability would be reduced under either scenario. In addition, we cannot assure you that additional competitors will not enter our existing markets, or that we will be able to compete successfully against existing or new competition.

Inflation in the PRC could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country. Rapid economic growth can lead to growth in the money supply and rising inflation. If prices for our products rise at a rate that is insufficient to compensate for the rise in the costs of supplies, it may have an adverse effect on profitability. In order to control inflation in the past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending. Such an austere policy can lead to a slowing of economic growth. In October 2004, the People's Bank of China, the PRC's central bank, raised interest rates for the first time in nearly a decade and indicated in a statement that the measure was prompted by inflationary concerns in the PRC economy. Repeated rises in interest rates by the central bank would likely slow economic activity in the PRC which could, in turn, materially increase our costs and also reduce demand for our products.

A widespread health problem in the PRC could negatively affect our operations

A renewed outbreak of SARS or another widespread public health problem in the PRC, such as bird flu, where a major portion of our revenue is derived, could have an adverse effect on our operations. Our operations may be impacted by a number of health-related factors, including quarantines or closures of some offices that would adversely disrupt our operations. Any of the foregoing events or other unforeseen consequences of public health problems could adversely affect our operations.

Enforcement against us or our directors and officers may be difficult

Because our principal assets are located outside of the U.S. and almost all our directors and officers reside outside of the U.S., it may be difficult for you to enforce your rights based on U.S. Federal securities laws against us and our officers and some directors or to enforce a U.S. court judgment against us or them in the PRC.

In addition, our operating subsidiary is located in the PRC and substantially all of its assets are located outside of the U.S. It may, therefore, be difficult for investors in the U.S. to enforce their legal rights based on the civil liability provisions of the U.S. Federal securities laws against us in the courts of either the U.S. or the PRC, even if civil judgments are obtained in U.S. courts to enforce such judgments in PRC courts. Further, it is unclear if extradition treaties now in effect between the U.S. and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties under the U.S. Federal securities laws or otherwise.

We have identified significant deficiencies in our internal controls.

As set forth in Item 9A, below, we have identified significant deficiencies in our internal controls. While we are taking steps to address these significant deficiencies, there can be no assurance that such steps will be adequate to entirely cure the deficiencies.

Inadequate funding for our capital expenditures may affect our growth and profitability

Our sales revenues have increased from $19,999,826 for the year ended June 30, 2004, to $ 90,871,223 for the year ended June 30, 2008. Our continued growth is dependent upon our ability to raise capital from outside sources. Our ability to obtain financing will depend upon a number of factors, including:

•

our financial condition and results of operations;

•

the condition of the PRC economy and the healthcare sector in the PRC;

•

conditions in relevant financial markets; and

•

relevant PRC laws and regulations.

If we are unable to obtain financing, as needed, on a timely basis and on acceptable terms to our investors or lenders, our financial position,competitive position, growth and profitability may be adversely affected.

We may not be able to effectively control and manage our growth.

If our business and markets grow and develop, it will be necessary for us to finance and manage expansion in an orderly fashion. We may not have the requisite experience to manage and operate a larger, more modern cornstarch manufacturing plant and a bigger glucose production line. In addition, we may face challenges in managing expanding product offerings and in integrating acquired businesses with our own. These events would increase demands on our existing management, workforce and facilities. Failure to satisfy these increased demands could interrupt or adversely affect our operations and cause production backlogs, longer product development time frames and administrative inefficiencies.

Significant fluctuations in raw material prices may have a material adverse effect on us

We do not have any long-term supply contracts with our raw materials suppliers. Any significant fluctuation in price of our raw materials could have a material adverse effect on the manufacturing cost of our products. We are subject to market conditions and although raw materials are generally available and we have not experienced any raw materials shortage in the past, we cannot assure you that the necessary materials will continue to be available to us at prices currently in effect or acceptable to us.

We may have limited options in the short-term for alternative supplies if our suppliers fail for any reason, including their business failure or financial difficulties, to continue the supply of raw materials. Moreover, identifying and accessing alternative sources may increase our costs.

Although we are in the corn-producing region in the Shandong province, there is no guarantee that we will not face a shortage of corn because of some natural calamity or other reasons beyond our control.

We had also mitigated the risks of a shortage in cornstarch by managing a cornstarch-producing company, Shouguang Shengtai Starch Company, and implemented a vertical integration manufacturing program, which includes building our own cornstarch processing plant, in which the plant is now operational. This will not only lower production costs and improve profit margins, but it will also allow Weifang Shengtai to produce higher quality, lower-cost cornstarch. We cannot guarantee these measures will be effective in eliminating all risks attendant to the supply of raw materials. In the event that our cost of materials increase, we may have to raise prices of our products, making us less competitive in price.

We may not be able to adjust our product prices, especially in the short-term, to recover the costs of any increases in raw materials. Our future profitability may be adversely affected to the extent we are unable to pass on higher raw materials costs to our customers.

Potential environmental liability could have a material adverse effect on our operations and financial condition.

To the knowledge of management, neither the production nor the sale of our products constitute activities, or generate materials in a material manner, that requires our operation to comply with the PRC environmental laws. Although it has not been alleged by PRC government officials that we have violated any current environmental regulations, we cannot assure you that the PRC government will not amend the current PRC environmental protection laws and regulations. Our business and operating results may be materially and adversely affected if we were to be held liable for violating existing environmental regulations or if we were to increase expenditures to comply with environmental regulations affecting our operations.

We rely on Mr. Qingtai Liu, our Chief Executive Officer and President, for the management of our business, and the loss of his services may significantly harm our business and prospects.

We depend, to a large extent, on the abilities and participation of our current management team, but have a particular reliance upon Mr. Qingtai Liu, our Chief Executive Officer and President, for the direction of our business. The loss of the services of Mr. Liu, for any reason, may have a material adverse effect on our business and prospects. We cannot assure you that the services of Mr. Liu will continue to be available to us, or that we will be able to find a suitable replacement for Mr. Liu. We have not entered into an employment contract with Mr. Liu. We do not have key man insurance policy on Mr. Qingtai Liu. If Mr. Liu dies and we are unable to replace Mr. Liu for a prolonged period of time, we may be unable to carry out our long term business plan and our future prospect for growth, and our business may be harmed.

We may not be able to hire and retain qualified personnel to support our growth and if we are unable to retain or hire such personnel in the future, our ability to improve our products and implement our business objectives could be adversely affected.

Our future success depends heavily upon the continuing services of the members of our senior management team, in particular our Chief Executive Officer and President, Mr. Qingtai Liu. If one or more of our senior executives or other key personnel is/are unable or unwilling to continue in his/her/their present positions, we may not be able to replace them easily or at all, and our business may be disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for senior management and personnel is intense, the pool of qualified candidates is very limited, and we may not be able to retain the services of our senior executives or senior personnel, or attract and retain high-quality senior executives or senior personnel in the future. This failure could materially and adversely affect our future growth and financial condition.

We have inadequate insurance coverage

We do not presently maintain product liability insurance, and our property and equipment insurance does not cover the full value of our property and equipment, which leaves us with exposure in the event of loss or damage to our properties or claims filed against us.

We currently do not carry any product liability or other similar insurance. We cannot assure you that we would not face liability in the event of the failure of any of our products. This is particularly true given our plan to significantly expand our sales into international markets, such as the United States, where product liability claims are more prevalent.

Except for automobile insurance, and Directors & Officers Liability and Company Reimbursement Insurance, we do not have other insurance such as business liability or disruption insurance coverage for our operations in the PRC.

We do not maintain a reserve fund for warranty or defective products claims. Our costs could substantially increase if we experience a significant number of warranty claims. We have not established any reserve funds for potential warranty claims since historically we have experienced few warranty claims for our products so that the costs associated with our warranty claims have been low. If we experience an increase in warranty claims or if our repair and replacement costs associated with warranty claims increase significantly, it would have a material adverse effect on our financial condition and results of operations.

Risks related to an investment in our common stock

Our Chief Executive Officer and President controls us through his position and stock ownership and his interests may differ from other stockholders

Our Chief Executive Officer and President, Mr. Qingtai Liu, beneficially owns approximately 38.64% of our common stock. As a result, although Mr. Liu is not the holder of a majority of the outstanding shares, Mr. Liu may be able to influence the outcome of stockholder votes on various matters, including the election of directors and extraordinary corporate transactions, including business combinations. Mr. Liu's interests may differ from other stockholders.

We do not intend to pay cash dividends in the foreseeable future

We currently intend to retain all future earnings for use in the operation and expansion of our business. We do not intend to pay any cash dividends in the foreseeable future but will review this policy as circumstances dictate. Should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary based in the PRC, Weifang Shengtai. Our operating subsidiary, from time to time, may be subject to restrictions on its ability to make distributions to us, including as a result of restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. See "Risks related to doing business in the People’s Republic of China."

There is currently a limited trading market for our common stock

Our common stock has been quoted on the over-the-counter Bulletin Board since January 2007. Because we were formerly a shell company, our bid and ask quotations have not regularly appeared on the OTC Bulletin Board for any consistent period of time. There is a limited trading market for our common stock and our common stock may never be included for trading on any stock exchange or through any other quotation system, including, without limitation, the American Stock Exchange. You may not be able to sell your shares due to the absence of an established trading market.

Our common stock is subject to the Penny Stock Regulations

Our common stock is, and will continue to be, subject to the SEC's "penny stock" rules to the extent that the price remains less than $5.00. Those rules, which require delivery of a schedule explaining the penny stock market and the associated risks before any sale, may further limit your ability to sell your shares.

The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share. Our common stock, when and if a trading market develops, may fall within the definition of penny stock and subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 or $300,000, together with their spouse).

For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our common stock and may affect the ability of investors to sell their common stock in the secondary market.

Our common stock is illiquid and subject to price volatility unrelated to our operations

The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

A large number of shares of common stock will be issuable for future sale which will dilute the ownership percentage of our current holders of common stock. We have successfully registered for public resale 8,750,000 shares (as well as 4,375,000 shares issuable on exercise of the attached warrants) belonging to our investors and the availability for public resale of those shares may depress our stock price.

Also as a result, there will be a significant number of new shares of common stock on the market in addition to the current public float. Sales of substantial amounts of common stock, or the perception that such sales could occur, and the existence of warrants to purchase shares of common stock at prices that may be below the then current market price of the common stock, could adversely affect the market price of our common stock and could impair our ability to raise capital through the sale of our equity securities.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

Our facility in the PRC is located at the Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400.

All land in the PRC is owned by the government and cannot be sold to any individual or entity. Instead, the government grants or allocates landholders a "land use right." From March 2000 to June 2007 Weifang Shengtai purchased various land use rights in succession for a total price of approximately $2,243,000. Weifang Shengtai obtained another land use right in July 2007 for a price of approximately $314,000. Weifang Shengtai obtained a new land use right in March 2008 for a price of $346,410. In May 2008, the Company paid approximately $734,000 to a local government which enabled the land use right to be classified from industrial use to commercial use. As a result Weifang Shengtai has the right to use various parcels of land that range from 20 to 50 years in term, all of which are currently being used by Weifang Shengtai for its business.

Weifang Shengtai occupies an area of approximately 292,275 square meters (72 acres) in Changle Economic and Technology Development Zone. Set forth below is the detailed information regarding the land:

Location	Area (square meters)		Construction on the Land	Expiration
Changle Economic and Technology Development Zone		85,880.43	New glucose production complex	April 20,2057
Changle Economic and Technology Development Zone		14,696	(Reserved for future growth)	January 14, 2030
Changle Economic and Technology Development Zone		73,313.38	Old glucose production facility	April 28, 2052
Changle Economic and Technology Development Zone		40,000	(Reserved for future growth)	March 10, 2058
Changle Economic and Technology Development Zone		19,692.4	Office and staff buildings	September 21, 2052
Changle Economic and Technology Development Zone		58,692	Cornstarch processing plant (11,800 sq meters)	April 2, 2054

Item 3. Legal Proceedings.

We know of no material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stock hol d er Matters and Issuer Purchas e s of Equity Securities.

Market I n format i on

We began trading on the Over the Counter Bulletin Board on January 12, 2007, and our symbol is "SGTI.OB." Prior to that, there had never been any established public market for shares of our common stock. The following table sets forth for the period indicated the prices of the common stock in the over-the-counter market, as reported and summarized by the OTC Bulletin Board. Such prices are based on inter-dealer bid and asked prices, without markup, markdown, commissions, or adjustments and may not represent actual transactions. As of September 24, 2008, the last reported bid price of our common stock was $2.50 per share and the last reported ask price was $2.70 per share.

CALENDAR QUARTER ENDED	HIGH BID(S)		LOW BID(S)
September 30, 2007	$	6	$	1.01
December 31, 2007	$	5.51	$	2.45
March 31, 2008	$	3.45	$	2.61
June 30, 2008	$	3.5	$	2.75

Holders

As of September 24, 2008, there were 19,094,805 shares of our common stock issued and outstanding and there were 46 holders of record of our common stock.

Dividends

Since our incorporation, no dividends have been paid on our common stock. We intend to retain any earnings for use in our business activities, so it is not expected that any dividends on our common stock will be declared and paid in the foreseeable future.

As a holding company, our ability to pay dividends is dependent on the receipt of dividends from SHI and our PRC based operating company Weifang Shengtai. The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. We receive substantially all of our revenues in Renminbi which is currently not a freely convertible currency. Shortages in the availability of foreign currency may restrict our ability to remit sufficient foreign currency to pay dividends, or otherwise satisfy foreign currency dominated obligations.

Equity Compensation Plan Information and Warrants and Options

As of September 24, 2008 we had 4,473,945 outstanding warrants to purchase 4,473,945 shares of common stock. Set forth below is a description of our outstanding warrants.

On May 15, 2007, we entered into a share purchase agreement and completed a private placement of our shares and warrants. Under the share purchase agreement we sold to the Selling Stockholders for $2.00 per share (or a total of $17,500,000) an aggregate of 8,750,000 shares of commons tock and 4,375,000 warrants to purchase 4,375,000 shares of common stock. The exercise price of the warrants is $2.60 per share, as adjusted, and the warrants expire on May 15, 2012 .

On May 15, 2007, we issued to Chinamerica Fund, L.P. 75,000 warrants and Jeff Jenson 25,000 warrants to compensate the former as lead investor and the latter in assisting in providing the shell. These warrants have an exercise price of $0.01 per share and a term of five years.

As part of their consideration for acting as placement agent for the May 15, 2007, private placement, Brill Securities, Inc . received five year warrants to purchase 218,750 shares of common stock at an exercise price of 2.60 per share, as adjusted. These have the same terms as the warrants issued to the Selling Stockholders in the May 15, 2007, private placement.

On January 4, 2008, the Company adopted “Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan” (the “Stock Incentive Plan”).

On May 14, 2008, the Company granted 500,000 stock options and 160,000 non-qualified stock options pursuant to the Stock Incentive Plan. All options have an exercise price of $3.34, which is the closing price on the date of grant, and expire five years after the date of grant. All options vest over a period of three years from the date of grant.

Pla n category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders	0		0	0
Equity compensation plans not approved by security holders	660,000	$	3.34	1,340,000
Total	660,000	$	3.34	1,340,000

Item 6. Selected Financial Data.

The following selected financial data for the fiscal years ended 2008,2007, 2006, 2005 and2004 are derived from our audited consolidated financial statements. The data should be read in conjunction with our consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.

Consolidated Statements of Operations	2008			2007		2006			2005			2004
	(audited)			(audited)		(audited)			(audited)			(audited)

Sales revenue	$	90,871,223		$	51,706,215	$	36,029,179		$	24,860,399		$	19,999,826

Cost of good sold		70,613,757			39,527,662		27,568,092			19,557,743			16,487,240

Gross profit		20,257,466			12,178,553		8,461,087			5,302,656			3,512,586

Selling, general and administrative expenses		7,390,623			4,674,679		3,831,778			3,242,330			2,474,813

Operating Income		12,866,843			7,503,874		4,629,309			2,060,326			1,037,773

Other net income		(1,810,530	)		524,088		(418,398	)		(445,169	)		(550,196	)

Income before Income taxes		11,056,313			8,027,962		4,210,911			1,615,157			487,577

Provision for Income Taxes		645,988			878,836		—			—			—

Net income	$	10,410,325		$	7,149,126	$	4,210,911		$	1,615,157		$	487,577

Foreign Currency Translation Adjustment		3,890,123			641,596		185,402			—			—
Comprehensive Income	$	14,300,448		$	7,790,722	$	4,396,313		$	11,615,157		$	487,577
Earning per share - basic	$	0.55		$	0.64	$	0.42		$	0.16		$	0.05
Earning per share - diluted	$	0.52		$	0.62	$	0.42		$	0.16		$	0.05
Basic weighted average common shares outstanding		18,993,789			11,251,712		10,125,000			10,125,000			10,125,000
Diluted weighted average common shares outstanding		19,874,486			11,477,545		10,125,000			10,125,000			10,125,000

	Year Ended June 30,
Consolidated Balance Sheets	2008			2007			2006			2005			2004
	(audited)			(audited)			(audited)			(audited)			(audited)
Current Assets		$	24,282,846		$	31,266,489		$	12,149,634		$	11,981,783		$	7,900,644
Total Assets			101,313,662			73,760,133			31,271,457			23,672,498			17,644,345
Current Liabilities			51,904,264			38,468,085			23,612,427			19,564,316			14,447,904
Total Liabilities			54,558,259			42,129,557			24,614,027			20,411,316			16,141,904
Total Stockholders’ Equity			46,755,403			31,630,576			6,657,430			3,261,182			1,502,441

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, youcan identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Factors that may cause our results to differ include, but are not limited to: changes in the scope or timing of our projects; slowdown in the demand for pharmaceutical grade glucose and glucose and starch products genereally, which could reduce revenues and profit margins.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Annual Report on Form 10-K to conform such statements to actual results or to changes in our expectations.

The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes and other financial information appearing elsewhere in this Form 10-K and other reports and filings made with the Securities and Exchange Commission. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made under the caption “Management’s Discussion and Analysis of Financial

Condition and Results of Operations,” and Item 1A—Risk Factors.

Overview

We are, through our wholly-owned subsidiary, Shengtai Holding Inc. and its wholly-owned subsidiary in the PRC, Weifang Shengtai Pharmaceutical Co., Ltd, a leading manufacturer and supplier of pharmaceutical grade glucose in the PRC. We also manufacture glucose and starch products for food and beverage industry for domestic market.

During the reporting period, we increased our production of pharmaceutical grade glucose products, in particular dextrose monohydrate. Dextrose monohydrate is one of the five most important types of medical prescriptions in the PRC and is one of the most widely used pharmaceutical products for restorative and nutritional purposes. It is used as a raw material in a wide array of pharmaceutical products such as transfusions and intravenous drips.

Our cornstarch production facility with the design capacity to produce 240,000 tons of cornstarch a year was completed and started production in January 2007. This new complex is close to our existing glucose production plant and new glucose production complex which was completed in July, 2008. Additionally, this new facility allows us to produce our own cornstarch and replace our suppliers of cornstarch. We are able to ensure the adequacy and quality of the cornstarch we use and also meet our increasing demand for quality cornstarch. Since cornstarch is produced on our premises, we are able to eliminate shipping costs to transport the cornstarch to our glucose production facility and operating costs, thus resulting in lower manufacturing costs.

In addition to our pharmaceutical glucose series of products, we also have produced other product lines of glucose and starch products such as industrial glucose, syrup, starch, Avermectins, and dextrin, which are used for food, beverage and industrial production. In May 2008 we stopped producing Avermectins because we can not currently produce and sell this product on an efficient scale and we want to focus our limited resources to our main product line for the time being.

all drivers to the demand for our products. The strong growth in the PRC pharmaceutical industry will also help increase the selling prices of our major products, and enhance our revenues and increase our gross profit margin.

Management has been placing emphasis on (i) product quality control (ii) enhancement of operating efficiency (iii) expansion of geographical coverage and diversification of customer base, and (iv) new product development. We believe that these points are essentially for maintaining our competitiveness.

Our production facilities have been fully certified GMP (Good Manufacturing Practice for Drugs), ISO9002 and HACCP. The rate of quality output (output conforming to pharmaceutical-grade glucose product specifications) is maintained at 100%. We have a three-tier quality control system and a well equipped quality inspection center to ensure timely detection and then reprocessing of non-conforming products.

Our production lines are vertically integrated. Our production facilities are all inter-connected by an enclosed pipeline system to enhance overall production efficiency, minimize wastage of water and raw materials, and to avoid production contamination.

We are currently developing new production technology to recycle our waste water and byproducts. At the same time, we are improving overall production efficiency by analyzing and ameliorating inefficient production processes. We believe that environment protection and production efficiency are important in our growth.

At the end of calendar year 2006, the Changle local government negotiated with us and required us to surrender the land use right of our old factory in the downtown Changle for their municipal construction. The land we occupied was 27,396 square meters. We were offered a bigger parcel of land in Changle Economic and Technology Development Zone with 85,880 square meters as described below.

In April 2007, we acquired the rights to use a piece of land measuring 85,880 square meters in the Changle Economic and Technology evelopment Zone. We developed the land and built a new glucose production complex with an expected production capacity of 120,000 tons per year ( It can expanded to 150,000 if necessary). The construction has been finished at the end of July 2008. The new facility will be used to produce pharmaceutical grade glucose.

In July 2007, we acquired the right to use a piece of land measuring 40,000 square meters in the Changle Economic and Technology Development Zone. We plan to use the land as reserve for future development. During the reporting period under review, we managed to successfully expand our domestic sales network. As of June 30, 2008, all the provinces except Tibet in the PRC have been covered by our domestic sales network. We have established representative offices in 4 provinces to fortify our domestic sales network. We believe that these offices help us to better interact with our customers, reinforce our sales force and improve our corporate image. In the meantime, we export our products to customers in over seventy countries, and we plan to increase our global sales in the coming years.

We constantly strive to broaden and diversify our customer base. A broader customer base can not only mitigate our reliance on certain big customers, but also bring us more opportunities. We believe a broader market for our products can increase demand for our products, reduce our vulnerability to market changes, and provide additional areas of growth in the future. Our top ten customers accounted for only 34.08% for our total sales for the fiscal year ended June 30, 2008.

Management is not aware of any adverse trends that would materially affect our market and financial position. We will continue to identify and pursue innovative products and technology to our increase market share and optimize our cost structure. Barring unforeseen circumstances, we anticipate continued growth in our sales growth. Our ability to meet increased customer demand and stay profitable will however still depend on factors such as our production capacity and working capital.

Result of Operations

Year Ended June 30, 2008 Compared with Year Ended June 30, 2007

The following table shows our operating results for the fiscal years ended June 30, 2008 and 2007.

	Fiscal Year ended June 30, 2008			Fiscal Year ended June 30, 2007
Sales Revenue	$	90,871,223		$	51,706,215
Costs of Goods Sold		70,613,757			39,527,662
Gross Profit		20,257,466			12,178,553
Sales, General and Administrative Expenses		7,390,623			4,674,679
Operating Income		12,866,843			7,503,874
Other Net Income (Expense)		(1,810,530	)		524,088
Income before Income Taxes		11,056,313			8,027,962
Provision for Income Taxes		645,988			878,836
Net income		10,410,325			7,149,126

Sales revenue for the fiscal year ended June 30, 2008 was $90,871,223, an increase of $37,165,008, or 75.75% compared with the corresponding period in 2007. This increase was mostly the result of the increase in sales of our corn starch and other products which include Fibers, Dextrin, corn embryo, Protein Powders, and Phytin. The increased revenue of these two categories is mainly because we completed the new cornstarch plant in September, 2006, and the cornstarch plant production capacity achieved 73.33% utilization rate in FY 2008. Glucose revenues did not increase because our old glucose plant has reached full production capacity. In addition, the sales prices increased, especially the price of the other products which include Fibers, Dextrin, corn embryo, Protein Powders, and Phytin.

Costs of goods sold for the year ended June 30, 2008 was $70,613,757, an increase of $31,086,095, or 78.64% compared with the corresponding period in 2007. The increase in cost of goods sold is in tandem with the increase in sales of our products and because of the increase of our main raw material - corn.

Gross profit for the year ended June 30, 2008 was $20,257,466, an increase of $8,078,913, or 66.34% compared with the corresponding period in 2007. The reason for the increase in gross profit was mostly due to the economies of scale resulting from the expansion of our production output and enhanced operating efficiency.

However, the profit margin of 2008 is lower than 2007. Gross profit margin for the year ended June 30, 2008 was 22.3%, while it was 23.6% for the same period in 2007. The decreased gross profit margin is because of the increased corn price and increased sales of lower gross profit margin corn products. As the product capacity of cornstarch is improved, we produced a large scale of cornstarch, and the new plant of glucose had not been completed, we cannot use most of the cornstarch, so we have to sell most of the cornstarch, and the sales composition of our products changed. We expect after the completion of our new glucose plant, most cornstarch will be consumed internally, and the sales of glucose will increase, so the sales will be composed of mainly higher gross profit margin products. Then the total gross profit margin should be higher.

Selling, general and administrative expenses for the year ended June 30, 2008 was $7,390,623, an increase of $2,715,944, or 58.10% compared with the corresponding period in 2007. The increase in our selling, general and administrative expenses was the result of the expansion of our production output, especially the expansion of domestic sales network. The higher worker insurance requirements related expenditures are also the causes of higher general and administrative expenses. However, the percentage of increase in our expenses is much lower than the percentage increase in our gross profit because of greater efficiencies of scale from a larger production output and our strict cost control. In addition, the expense of stock options $317,636 was also a part of selling, general and administrative expenses.

Net income for the year ended June 30, 2008 was $10,410,325, an increase of $3,261,199, or 45.62% compared with the corresponding period in 2007. The increase of net income was due to our increase in production output, sales volume and gross profit.

Fiscal Year Ended June 30, 2007 and Fiscal Year Ended June 30, 2006

The following table shows our operating results for the fiscal years ended June 30, 2006 and 2007.

	Fiscal Year ended June 30, 2007		Fiscal Year ended June 30, 2006
Sales Revenue	$	51,706,215	$	36,029,179
Costs of Goods Sold		39,527,662		27,568,092
Gross Profit		12,178,553		8,461,087
Sales, General and Administrative Expenses		4,674,679		3,831,778
Operating Income		7,503,874		4,629,309
Other Net Income (Expense)		524,088		(418,398	)
Income before Income Taxes		8,027,962		4,210,911
Provision for Income Taxes		878,836		—
Net income		7,149,126		4,210,911

Sales revenue for the fiscal year ended June 30, 2007 was $51,706,215, an increase of $15,677,036, or 43.5% compared with the corresponding period in 2006. This increase was mostly the result of the increase in sales of our glucose products and higher product prices. In addition, our new cornstarch plant began production in 2007 resulting in maximizing the production of our glucose manufacturing facility and the sale of additional excess cornstarch to outside customers. Accordingly, the total sales of both glucose and cornstarch were both increased.

Costs of goods sold for the year ended June 30, 2007 was $39,527,662, an increase of $11,959,570, or 43.4% compared with the corresponding period in 2006. The increase in cost of goods sold is in tandem with the increase in sales of our products.

Gross profit for the year ended June 30, 2007 was $12,178,553, an increase of $3,717,466, or 43.9% compared with the corresponding period in 2006. The reason for the increase in gross profit was mostly due to the economies of scale resulting from the expansion of our production output and enhanced operating efficiency. Although product cost increased as a result of price increases of corn and other raw materials, the selling price was higher than the price increase of corn, thus making our gross profit higher.

However, there is not significant increase of gross profit margin from fiscal 2006 to 2007. Gross profit margin for the year ended June 30, 2007 was 23.6%, while it was 23.5% for the same period in 2006. We produced some new products with high profit margins, but at the same time the sales of lower profit margin products to outside customers, such as cornstarch, averaged down our overall gross profit margin.

Selling, general and administrative expenses for the year ended June 30, 2007 was $4,674,679, an increase of $842,901, or 22% compared with the corresponding period in 2006. The increase in our selling, general and administrative expenses was the result of the expansion of our production output, especially the expansion of domestic sales network. The higher worker insurance requirements and environment related expenditures are also the causes of higher general and administrative expenses. However, the percentage of increase in our expenses is much lower than the percentage increase in our gross profit because of greater efficiencies of scale from a larger production output and our strict cost control.

Net income for the year ended June 30, 2007 was $7,149,126, an increase of $2,938,215, or 69.8% compared with the corresponding period in 2006. The increase of net income was due to our increase in production output, sales volume and gross profit margin, as well as the gain derived from surrendering our land use rights in the piece of property in downtown Changle to the Changle local government.

Liquidity and Capital Resources

Operating Activities

Fiscal Year Ended June 30, 2008 compared to Fiscal Year Ended June 30, 2007

Net cash provided by operating activities for fiscal year 2008 was $3,580,467, compared to $8,345,730 provided by operating activities for fiscal year 2007. The decrease of net cash provided by operations was mostly because of the following reasons: We have increased sales. More other receivables have been collected offset by decrease of accounts payable as we have acquired plant and equipment through accounts payable. Notes receivable and other receivables are classified as operating cash flows because these assets are used for operating purposes. These assets are mainly used to purchase our raw materials and fund our normal operations.

Investing Activities

Fiscal Year Ended June 30, 2008 compared to Fiscal Year Ended June 30, 2007

Net cash used in investing activities for fiscal 2008 was $10,084,751, compared to $23,944,638 used in investing activities for fiscal 2007. The decrease of net cash used in investing activities is because we spent most of our capital expenditures for building our cornstarch and glucose factories in fiscal year 2007. In fiscal year 2008, we are in the process of completing the glucose factory and there is less capital expenditure. The glucose factory was completed in July 2008.

Financing Activities

Fiscal Year Ended June 30, 2008 Compared to Fiscal year Ended June 30, 2007

Net cash provided by financing activities for fiscal 2008 was $3,176,334 compared to $21,677,695 for the same period in fiscal 2007. The decrease was mostly because there was an equity financing of $15,256,428 in 2007 while there was no equity financing in 2008.

Contractual obligations
	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations	$	5,099,205	$	2,039,682	$	3,059,523	$	—	$	—
Capital Lease Obligations		—		—		—		—		—
Operating Lease Obligations		—		—		—		—		—
Purchase Obligations		—		—		—		—		—
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP		—		—		—		—		—
Total	$	5,099,205	$	2,039,682	$	3,059,523	$	—	$	—

Loans

Other than the equity financing last year, our PRC operating subsidiary, Weifang Shengtai financed its operations and capital expenditure requirements primarily through bank loans and operating income. Weifang Shengtai had a total of $22,658,270,$18,870, 250, and $8,576,200 short term bank loans outstanding as of June 30, 2008, 2007, and 2006, respectively. The loans were secured by Weifang Shengtai’s properties and accounts receivable. The terms of all these short term loans were for one year. Weifang Shengtai has never defaulted on any loans.

Weifang Shengtai does not have any long term loans from local banks. The outstanding long-term loans, or the non-current portion of payables, which can be classified as long term liabilities, were $2,653,995, $3,661,472, and $1,001,600 as of June 30, 2008, 2007, and 2006, respectively.

Guarantees

We have guaranteed certain borrowings of other unrelated third parties including short term bank loans, lines of credit and bank notes. The total guaranteed amounts were $7,295,000, $8,560,650 and $14,270,880 as of June 30, 2008, 2007 and 2006. Some unrelated third parties have guaranteed approximately $ 13,729,190, $ 14,925,250 and $ 5,158,240 of our debt, as of June 30, 2008, 2007 and 2006.

Future cash commitments

We estimate the need for $6 million to $10 million to run the new glucose facilities. The exact amount will be determined based on both the market demand of our products and the time needed for these facilities to run at full capacity. We may carefully review our financial condition and consider financing either with the cash internally generated, bank loans, or with additional equity.

Critical Accounting Policies and Estimates

We have disclosed in the notes to our financial statements those accounting policies that we consider to be significant in determining our results of operations and our financial position which are incorporating by reference herein. We believe that the following reflect the more critical accounting policies that currently affect our financial condition and results of operations.

Revenue recognition

We utilize the accrual method of accounting. Revenue is recognized when the products are delivered, title has passed, pricing is fixed and collectibility is reasonably assured. Sales revenue represents the invoiced value of goods, net of value-added tax (VAT) and estimated returns of product from customers.

Use of estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Accounts Receivables

Accounts receivables are stated at net realizable value. Any allowance for doubtful accounts is established based on the management’s assessment of the recoverability of accounts and other receivables. Management reviews our accounts receivable on a regular basis to determine if the bad debt allowance is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Known bad debts are written off as incurred.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using straight-line method, with 3% residual value, over the estimated useful lives of the assets.

Foreign currency translation

Our functional currency is the Chinese Renminbi (“RMB”). Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated Other Comprehensive Income”. Gains and losses resulting from foreign currency translations are included in Accumulated Other Comprehensive Income.

Item7A. Quantitative and Qualitative Disclosures About Market Risk.

Credit Risk.

We are exposed to credit risk from our cash at bank, fixed deposits and contract receivables. The credit risk on cash at bank and fixed deposits is limited because the counterparts are recognized financial institutions. Contract receivables are subject to credit evaluations. We periodically record a provision for doubtful collections based on an evaluation of the collectibility of contract receivables by assessing, among other factors, the customer’s willingness or ability to pay, repayment history, general economic conditions and our ongoing relationship with the customers.

Country Risk.

Substantial portion of our business, assets and operations are located and conducted in the PRC. While the PRC’s economy has experienced significant growth in the past twenty years, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of the PRC, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in regulations applicable to us. If there are any changes in any policies by the PRC government and our business is negatively affected as a result, then our financial results, including our ability to generate revenues and profits, will also be negatively affected.

Foreign Currency Risk.

Substantially all of our operations are conducted in the PRC. Our sales and purchases are conducted within the PRC in Renminbi. Conversion of the Renminbi into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system. Although the PRC government has stated its intention to support the value of the Renminbi, there can be no assurance that such exchange rate will not again become volatile or that the Renminbi will not devalue significantly against the U.S. dollar. Exchange rate fluctuations may adversely affect the value, in U.S. dollar terms, of our net assets and income derived from our operations in the PRC. In addition, the Renminbi is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.

Item 8. Financial Statements and Supplementary Data.

The information required by this Item 8 is included in Item 15 of this Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

During the fiscal year ended June 30, 2008, there were no changes in and disagreements with accountants and financial disclosure.

Item 9A Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Mr. Qingtai Liu, our Chief Executive Officer and Ms. Yiru Melody Shi, our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Report. Based on that evaluation, our officers concluded that due to the material weaknesses in the internal control over financial reporting as disclosed below in the Section of “Management’s Report on Internal Control over Financial Reporting,” our disclosure controls and procedures were ineffective and are not adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.

Notwithstanding management’s assessment that our internal control over financial reporting was ineffective as of June 30, 2008 due to the material weakness described below under Management’s Report on Internal Control Over Financial Reporting, we believe that the consolidated financial statements included in this Annual Report on Form 10-K correctly present our financial condition, results of operations and cash flows for the fiscal years covered thereby in all material respects after all the adjustments proposed by our auditors were accepted and made by the Company.

Management’s Report on Internal Control over Financial Reporting

Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management is responsible for establishing and maintaining adequate internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, the application of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that compliance with the policies or procedures may deteriorate.

We have evaluated the effectiveness of our internal control over financial reporting as of June 30, 2008. This evaluation was performed using the Internal Control – Evaluation Framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on such evaluation, management concluded that the Company’s internal control over financial reporting was not effective and identified the material weaknesses in the Company’s internal control over financial reporting as stated below.

Material weaknesses related to:

Due to those above material weaknesses, during the annual audit process for the year ended June 30, 2008, our independent auditor proposed material adjustments to allowance for bad debt, interest expenses from the capital lease equipment and additional liability due from the asset purchase.

Management Remediation Plan

During its audit of our consolidated financial statements for the fiscal year ended June 30, 2008, our independent registered public accounting firm reported material weakness in our financial statement reporting process.

In order to correct the foregoing material weaknesses, we have taken the following remedial measures:

4. We are also planning to establish an internal audit unit to establish effective internal control. We plan to allocate sufficient resources to achieve an effective internal audit function.

5. We plan to recruit and train additional accounting personnel with experience in U.S. GAAP.

We believe that the steps we are taking are necessary for remediation of the material weaknesses identified above, and we will continue to monitor the effectiveness of these steps and to make any changes that our management deems appropriate.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting has occurred during the quarter ended June 30, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Auditor Attestation

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Below are our executive officers and directors. Most of our executive officers and directors are residents of the PRC. As a result, it may be difficult for investors to effect service of process within the United States upon them or to enforce court judgments obtained against them in the United States courts.

Directors and Executive Offic ers	Position/Ti tle	Age
Qingtai Liu	Chief Executive Officer / Director	50
Yongqiang Wang	Director	39
Chris W. Wang	Director	37
Changxin Li	Director	48
Winfred Lee	Director	48
Yiru Shi	Chief Financial Officer	35

The following is a summary of the biographical information of our directors and officers:

Qingtai Liu , 50, graduated from the Electrical Engineering Faculty of the Shandong Technical University with a Bachelor of Science degree in February 1982. He became the workshop director and head of the production department of Changle Wireless Device Factory until 1988, whereupon he assumed the position of Head of Science and Technology at the Changle Power Factory. In 1990, Mr. Liu became the Director of Weifang Fifth Pharmaceutical Plant. From January 1999 to present day, he is the Chairman and Chief Executive Officer of Weifang Shengtai Pharmaceutical Co., Ltd. Under his leadership, the Company successfully developed unique production techniques for the production of glucose and medicinal coating products, and has won Technology Innovation awards issued by the Chang Le County, Weifang City and the Shandong provincial government offices. The medicinal coating material technology that Mr Liu jointly developed with the Shandong University has been certified by the Technology Development Bureau of the Shandong Province to be of international standard. Over the years, Mr Liu has been endorsed by the Weifang City Government office as a Leading Technology Innovator and a Distinguished Pharmaceutical Production Director. He also is the deputy to the People’s Conference of both Weifang City and Changle County.

Yongqiang Wang , 39, graduated with an Associates degree from the Shandong Economic and Management Institute. He joined Weifang Shengtai in April 2006 as the assistant to the General Manager of the Accounts Department and was in charged of the finance department. He assumed the position of Deputy General Manager of the Accounts Department in February 2007. Prior to joining us, Mr. Wang worked as a financial manager for various enterprises.

Chris W. Wang , 37, has served as the Chief Financial Officer of Fushi International, Inc. since December 13, 2005. Since March 2005, Mr. Wang also serves as the Chief Financial Officer of Dalian Fushi. Mr. Wang served as an Executive Vice President of Redwood Capital, Inc. from November 2004 o March 2005, with specific focus on providing strategic and financial advisory services to PRC-based clients seeking access to the U.S. capital markets. Mr. Wang previously served as Assistant VP of Portfolio Management at China Century Investment Corporation from October 2002 to September 2004. Prior to that, Mr. Wang worked for Credit Suisse First Boston (HK) Ltd. Fluent in both English and Chinese, Mr. Wang holds an MBA in Finance and Corporate Accounting from Simon Business School of University of Rochester.

Changxin Li , 48, has been the Chief of the Department of Medicine, member of the Credentials Committee and Medical Director of both the Echocardiography Laboratory and Cardiopulmonary Department of the Otsego Memorial Hospital since 2005. He has also been an internist with the Otsego Memorial Hospital since 1995. Mr. Li graduated with an MB from the Weifang (formerly Changwei) Medical College, Weifang, Shandong, China in 1982 and a PhD from the Department of Physiology, University of Alberta, Edmonton, Alberta, Canada in 1990. He is a Fellow of the American College of Physicians (USA).

Winfred Lee , 48, has been a Contract Administrator with Tenet Healthsystems for South Bay Medical Center, North Hollywood Medical Center, Midway Hospital, Century City Hospital, and Brotman Medical Center from 1997. Mr. Lee graduated with a Bachelor of Science in Business Management from Brigham Young University, Provo, Utah in 1984. He then graduated with a Doctor of Medicine from the Medical College of Wisconsin, Milwaukee, Wisconsin, in 1988 and a Doctor of Jurisprudence from the J. Reuben Clark Law School at Brigham Young University, Provo, Utah, in 1992. Mr. Lee is a member of the California Bar and the Phi Delta Phi Legal Society

Yiru Shi , 35, Served as audit manager for Kabani & Co., Inc., Controller at Aroa Marketing, Channel Program Manager at Sun Microsystems and financial analyst at Hewlett Packard China, obtained MBA from University of California, Irvine, Bachelors degrees in Computer Science and International Trade and Business from Beijing Polytechnic University and is a Certified Public Accountant

All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of the board of directors.

There are no family relationships among our directors or executive officers. There is no arrangement or understanding between or among our officers and directors pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current Board of Directors.

Our directors and executive officers have not, during the past five years:

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had any bankruptcy petition foiled by or against any business of which was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time,

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been convicted in a criminal proceeding and is not sub ject to a pending criminal proceeding,

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been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise lim iting his involvement in any type of business, securities, futures, commodities or banking activities; or

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been found by a court of competent jurisdiction (in a civil action), the Securities Exchange Commission or the Commodity Futures Trading Commis sion to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors and persons who own more than 10% of a registered class of our equity securities to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (the "SEC"). Such persons are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Based solely on review of the copies of such forms received by us with respect to fiscal year 2007, or written representations from certain reporting persons, we believe that all filing requirements applicable to its directors, officers and persons who own more than ten percent of a registered class of our equity securities have been complied.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

We endeavor to provide our “named executive officers” (as defined in Item 402 of Regulation S-K) with a competitive base salary that is in- line with their roles and responsibilities when compared to peer companies of comparable size in the same or similar locality.

It is not uncommon for PRC private corporations in that locality to have base salaries as the sole and only form of compensation. The base salary level is established and reviewed based on the level of responsibilities, the experience and tenure of the individual and the current and potential contributions of the individual. The base salary is compared to the list of similar positions within comparable peer companies and with consideration of the executive’s relative experience in his or her position. Base salaries are reviewed periodically and at the time of promotion or other changes in responsibilities.

We plan to implement a more comprehensive compensation program, which takes into account other elements of compensation, including without limitation, short and long term compensation, cash and non-cash, and other equity-based compensation such as stock options. This compensation program shall be comparative to our peers in the industry and aimed to retain and attract talented individuals.

We have formed a Compensation Committee of the Board of Directors comprised solely of independent directors to oversee the compensation of our named executive officers. The members of our Compensation Committee are Wenbing Christopher Wang (Chairman) Changxin Li; and Winfred Lee.

Summary Compensation Table

The following is a summary of the compensation we paid for each of the two years ended June 30, 2008, and 2007, respectively (i) to the person who acted as our principal executive officer during our fiscal year ended June 30, 2008 and (ii) to the former employee who received compensation in excess of $100,000 for one of these years . None of our other executive officers received compensation in excess of $100,000 for any of these two years.

Name and Principal Position	Year		Salary ($)	Bonus($)		Stock Awards($)	Option Awards($)		Non Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($ )		All Other Compension ($)	Total ($)

Qingtai Liu (1)		2008	133,714		—	—		96,253	—		—	—		229,967
		2007	19,662		—	—		—	—		—	—		19,662

Yizhao Zhang (2)		2008	105,500		—	—		77,003	—		—	—		207,003
		2007	12,000		—	—		—	—		—	—		12,000

(1)	Chairman and Chief Executive Officer (P rincipal Executive Officer).

(2)	Mr. Zhang joined us as our Chief Financial Officer in May 2007 and resigned in May 2008.

Grants of Plan-Based Awards in Fiscal 2008

On January 4, 2008, the Company adopted “Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan” (the “Stock Incentive Plan”).

Outstanding Equity Awards at 2008 Fiscal Year End

As of June 30, 2008, there are 660,000 shares of options outstanding.

Equity Compensation Plan Information at June 30, 2008

The following table sets forth information as of June 30, 2008 regarding compensation plans under which the Company’s equity securities are authorized for issuance.

	(a)		( b)		(c)
Plan Category	Number of securities to be issued upon exercise of outstanding equity awards		Weighted-average exercise price of outstanding equity awards($ )		Number of securities remaining available for future issuance un der equity compensation plans (excluding securities reflected in column(a) )
Equity compensation plans approved by security holders Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan.		—				—

Equity compensation plans not approved by security holder s Issuances of non-qualified options to employees		660,000	$	3.34		1,340,000

Total		660,000	$	3.34		1,340,000

Option Exercises and Stock Vested in Fiscal 2008.

There were no option exercises or stock vested in 2008.

Employment Agreements

We have no employment agreements with any executive officer, except for our employment agreement dated May 1, 2008 with Yiru (Melody) Shi, our Chief Financial Officer.

Compensation of Directors.

Our current non-executive directors are compensated for all services they perform as directors , including attendance at Board of Directors meetings and service as members of committees of the Board of Directors to which they are appointed. Executive officers are not compensated for services they perform as directors of the Company. The details of such compensation are:

ཫ

annual compensation of $15,000;

ཫ

additional annual compensation of $15,000 if the director serves as the Chairman of the Audit Committee; and

ཫ

we may also grant the non-executive directors certain options to purchase our shares, the amount a nd terms of which shall be determined by the Board of Directors.

The non-executive directors are also reimbursed for all of their out-of-pocket expenses in traveling to and attending meetings of the Board of Directors and committees on which they would serve.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information with respect to the beneficial ownership of our voting securities by (i) any person or group owning more than 5% of any class of voting securities, (ii) each director, (iii) our chief executive officer and the Company’s top three most highly compensated officers and (iv) all executive officers and directors as a group as of June 30, 2008.

Na me and Address of Beneficial Owne r	Title of Cl ass	Amount and Nature of Beneficial Ownership (1)(2)		Per cent of Class ( 4)

Qingtai Liu (3)

Chief Executive officer and President
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	Common Stock		7,378,025	38.64	%

Yiru Shi (3)

Chief Financial Officer, President and a director
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	—		—	—

Yongqiang Wang (3)

director
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	—		—	—

Chris Wenbing Wang (3)

director
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	—		—	—

Winfred Lee (3)

director
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	—		—	—

Changxin Li (3)

director
Hi-Tech Industrial Park of Changle County, Shandong Province, PRC 262400	—		—	—

China Private Equity Partners Co., Limited

15 Church Street, Alpine, NJ 07620Common Stock	Common Stock		1,025,000	5.37	%

Pope Investments LLC

5150 Poplar Avenue, Suite 805, Memphis, TN 38137	Common Stock		2,650,000	13.88	%

(1) On May 15, 2007, we entered into the share exchange agreement. Under the share exchange agreement Messrs. Qingtai Liu and Chenghai Du, holders of all the issued and outstanding shares of common stock of Shengtai Holding, Inc. (SHI), exchanged their SHI shares for 8,212,500 and 912,500 newly-issued shares of the Company’s common stock (representing approximately 91% of the issued and outstanding shares then outstanding). The share exchange closed on May 15, 2007. Mr. Qingtai Liu entered into an agreement dated May 8, 2006 with certain foreign finders and Hickey Turner Capital, Inc. in which Mr. Liu agreed to transfer 446,175 shares of the our common stock for the benefit of the foreign finders and Hickey Turner Capital, Inc. and/or its designees for consulting services. In addition to transferring these shares, on May 15, 2007, he also transferred an aggregate of 776,600 shares to his wife and minor child equally on the same date (which shares are deemed to be beneficially owned by Mr. Liu).

(2) On May 15, 2007, we entered into and closed on a share purchase agreement. Under the share purchase agreement, certain investors purchased for $2.00 per share (or a total of $17,500,000) an aggregate of 8,750,000 shares of common stock and 4,375,000 attached five year warrants.

(3) Messrs. Qingtai Liu and Yongqiang Wang were appointed directors of the Company on May 15, 2007. Mr. Zhang was appointed as our Chief Financial Officer in May 2007. Ms Shi was appointed as our Chief Financial Officer in May 2008. Messrs. Wang, Li and Lee were appointed directors of the Company on June 22, 2007.

(4) Based on 19,094,805 shares of common stock issued and outstanding on June 30, 2008. In addition, in determining the percent of common stock owned by a person on June 30, 2008, (a) the numerator is the number of shares of the class beneficially owned by such person and includes shares which the beneficial owner may acquire within 60 days upon conversion or exercise of a derivative security, and (b) the denominator is the sum of (i) the shares of that class outstanding on June 30, 2008, and (ii) the total number of shares that the beneficial owner may acquire upon conversion or exercise of a derivative security within such 60 day period. Unless otherwise stated, each beneficial owner has sole power to vote and dispose of the shares.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Weifang Shengtai entered into a joint venture partnership with Weifang City Investment Company and Changle Century Sun Paper Industry Co., Ltd on September 16, 2003 and formed Changle Shengshi Redian Co., Ltd (“Changle Shengshi”). Changle Shengshi was incorporated at Weifang City, Shandong Province, People’s Republic of China. Changle Shengshi’s principal activity is to produce and sell electricity and heat.

Weifang Shengtai owned a 30% interest in Changle Shengshi as of June 30, 2004. On April 12, 2005, its percentage ownership in Changle Shengshi was diluted from 30% to 20% due to an additional investment into Changle Shengshi from another party. Changle Shengshi has a registered capital of approximately $10,800,000. Weifang Shengtai invested approximately $2,200,000 towards its registered capital, which accounts for a 20% share of Changle Shengshi’s stock. As of June 30, 2008, total investment of approximately $3,607,912 represents 20% of Changle Shengshi’s paid-in capital, which includes earnings on equity investment.

As an investor and shareholder of Changle Shengshi, Weifang Shengtai enjoys a preferential discount of 19.7% off the market price of electricity supplied by the plant to Weifang Shengtai. The intercompany profits were eliminated on our financial statements.

Weifang Shengtai had a total of $714,776, $858,881 and $348,366 of accounts payable to Changle Shengshi at June 30, 2008,2007 and 2006, respectively. The utilities expenses amounted to $9,851,833 $4,958,249 and $1,705,675, for the years ending June 30, 2008,2007 and 2006, respectively.

The Company loaned money to C hangle Shengshi and ente red i nto two loan contracts as follow s:

	June 30, 2008		June 30, 2007
Due on November 19, 2007, unsecured, 7.95% interest rate per annum	$	—	$	657,500
Due on September 14, 2009, unsecured, 7.6% interest rate per annum		437,700		394,500
Total	$	437,700	$	1,052,000

The Company also loaned money to Changle Shengshi in June 2007, for temporary cash flow needs. This transaction is recurring in nature. The Company does not charge interest on these receivables and it is due on demand. As of June 30, 2007, total receivable due from Changle Shengshi was $1,499,207. This balance was repaid by Changle Shengshi in July 2007. As of June 30, 2008, total receivable due from Changle Shengshi was $0.

Item 14. Principal Accounting Fees and Services.

Aggregate fees billed by our current principal accountants, Moore Stephens Wurth Frazer and Torbet, LLP for audit services related to the most recent fiscal year, and for other professional services billed in the most recent fiscal year, were as follows:

	Fiscal 2007		Fiscal 2008 (3)
Audit Fees (1)	$	145,000	$	145,000
Audit-Related Fees		—		—
Tax Fees (2)		—		5,000
All Other Fees		—		—
Total	$	145,000	$	150,000

(1)	Comprised the audit of the Company's annual financial statements and reviews of the Company's quarterly financial statements, as well as consents related to and reviews of other documents filed with the Securities and Exchange Commission.

(2)	Comprised preparation of all federal and state corporate income tax returns for the Company and its subsidiaries.

(3)

In our Annual Report on Form 10-KSB filed on March 27, 2007, we reported that our Board of Directors, pursuant to our Bylaws, approve d a change in our fiscal year end from December 31 to June 30. Disclosure of the fees billed by our current accountants, Moore Stephens Wurth Frazer and Torbet, LLP is for the fiscal year ended June 30, 2008.

Aggregate fees billed by our previous principal accountants, Mantyla McRoberts LLC, for audit services related to the most recent two fiscal years, and for other professional services billed in the most recent two fiscal years, were as follows:

	Fiscal 2006(3)
Audit Fees (1)	$	10,792
Audit-Related Fees		—
Tax Fees (2)	$	250
All Other Fees		—
Total	$	11,042

(1)	Comprised the audit of the Company's annual financial statements and reviews of the Company's quart erly financial statements, as well as consents related to and reviews of other documents filed with the Securities and Exchange Commission.

(2)	Comprised preparation of all federal and state corporate income tax returns for the Company and its subsidia ries.

(3)

In our Annual Report on Form 10-KSB filed on March 27, 2007, we reported that our Board of Directors, pursuant to our Bylaws, approved a change in our fiscal year end from December 31 to June 30. Disclosure of the fees billed by our ex accoun tants, Mantyla McRoberts LLC is for the fiscal years ended December 31, 2006 and 2005.

Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our independent accountants must now be approved in advance by our Audit Committee to assure that such services do not impair our accountants' independence . Our Audit Committee’s Chairman is Mr. Chris Wang and the other members are Changxin Li and Winfred Li. Our Audit Committee reviews and recommends to our Board of Directors for approval audit and permissible non-audit services performed by Moore Stephens Wurth Frazer and Torbet, LLP as well as fees charged by them for such services. Previously when we did not have an Audit Committee, our Board of Directors carried out this function.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)	Financial Statements and Financial Statement Schedules

(1)	Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets as of June 30, 2008 and 2007	F-2

Consolidated Statements of Income and Other Comprehensive Income for the Years Ended June 30, 2008, 2007 and 2006	F-3

Consolidated Statements of Shareholders' Equity for the Years Ended June 30, 2008, 2007 and 2006	F-4

Consolidated Statements of Cash Flows for the Years Ended June 30, 2008, 2007 and 2006	F-5

Notes to Consolidated Financial Statements	F-6

All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Shengtai Pharmaceutical Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Shengtai Pharmaceutical Inc. and subsidiaries (the “Company”) as of June 30, 2008 and 2007, and the related consolidated statements of income and other comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2008. Shengtai Pharmaceutical Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Shengtai Pharmaceutical Inc. and subsidiaries as of June 30, 2008 and 2007, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2008 in conformity with accounting principles generally accepted in the United States of America.

/s/ Moore Stephens Wurth Frazer and Torbet, LLP

Walnut, California

September 26, 2008

F-1

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2008 AND 2007

	2008		2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,405,606	$	6,420,439
Restricted cash		6,763,500		6,128,500
Accounts receivable, net of allowance for doubtful accounts of $440,701 and $431,178 as of June 30, 2008 and 2007, respectively		7,614,236		5,779,967
Notes receivable		458,630		984,675
Other receivables		691,215		2,984,484
Other receivables - related parties		—		2,491,656
Other receivables - shareholder		—		1,229,625
Loan to related party		—		657,500
Inventories		5,039,278		4,449,267
Prepayments		310,381		140,376
Total current assets		24,282,846		31,266,489

PLANT AND EQUIPMENT, net		69,943,021		30,178,074

OTHER ASSETS:
Investment in unconsolidated affiliate		3,607,912		2,675,678
Loan to related party - non-current		437,700		394,500
Prepayments - non-current		—		7,429,371
Intangible assets, net		3,042,183		1,816,021
Total other assets		7,087,795		12,315,570

Total assets	$	101,313,662	$	73,760,133

LIABILITIES AND SHAREHOLDERS ' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	7,669,728	$	3,807,997
Accounts payable - related party		714,776		949,992
Notes payable - banks		10,942,500		8,942,000
Short term loans		22,658,270		18,870,250
Accrued liabilities		261,187		229,643
Other payable		2,146,108		1,526,903
Employee loans		1,382,287		596,516
Employee loan - officer		53,605		—
Third party loan		640,228		318,274
Customer deposits		804,323		796,228
Long term loan - current maturities		—		381,350
Taxes payable		4,631,252		2,048,932
Total current liabilities		51,904,264		38,468,085

LONG TERM LIABILITIES
Other payable - noncurrent		2,653,995		3,661,472
Total long term liabilities		2,653,995		3,66 1,472

Total liabilities		54,558,259		42,129,557

COMMITMENTS AND CONTINGENCIES		—		—

SHAREHOLDERS' EQUITY:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding		—		—
Common stock, $0.001 par value, 100,000,000 shares authorized, 19,094,805 and 18,875,000 shares issued and outstanding as June 30, 2008 and 2007, respectively		19,095		18,875
Paid-in capital		19,987,708		19,163,549
Statutory reserves		2,894,902		1,735,484
Retained earnings		19,136,577		9,885,670
Accumulated other comprehensive income		4,717,121		826,998
Total shareholders' equity		46,755,403		31,630,576

Total liabilities and shareholders' equity	$	101,313,662	$	73,760,133

F-2

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED JUNE 30, 2008, 2007 AND 2006

	2008			2007			2006

SALES REVENUE	$	90,871,223		$	51,706,215		$	36,029,179

COST OF SALES		70,613,757			39,527,662			27,568,092

GROSS PROFIT		20,257,466			12,178,553			8,461,087

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		7,390,623			4,674,679			3,831,778

INCOME FROM OPERATIONS		12,866,843			7,503,874			4,629,309

OTHER (EXPENSE) INCOME:
Equity in income of unconsolidated affiliate		272,239			131,420			41,635
Gain from sales of land use rights		—			1,647,833			—
Other income		584,749			121,798			181,874
Other expense		(391,858	)		(225,898	)		(214,641	)
Interest expense and other charges		(2,447,608	)		(1,270,418	)		(555,572	)
Interest income		171,948			119,353			128,306
Other income (expense), net		(1,810,530	)		524,088			(418,398	)

INCOME BEFORE PROVISION FOR INCOME TAXES		11,056,313			8,027,962			4,210,911

PROVISION FOR INCOME TAXES		645,988			878,836			—

NET INCOME		10,410,325			7,149,126			4,210,911

OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustments		3,890,123			641,596			185,402

COMPREHENSIVE INCOME	$	14,300,448		$	7,790,722		$	4,396,313

EARNINGS PER SHARE
Basic	$	0.55		$	0.64		$	0.42
Diluted	$	0.52		$	0.62		$	0.42

WEIGHTED AVERAGE NUMBER OF SHARES
Basic		18,993,789			11,251, 712			10,125,000
Diluted		19,874,486			11,477,545			10,125,000

F-3

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED JUNE 30, 2008, 2007 AND 2006

	Comm on stock						Capital			Retained earnings					Accumulated other
					Paid-in		contribution			Statutory					comprehensive
	Shares		Par value		capital		receivable			reserves		Unrestr icted			income		Totals

BALANCE, June 30, 2005		10,125,000	$	10,125	$	3,915,871	$	(1,925,996	)	$	384,832	$	876,350		$	—	$	3,261,182

Dividends declared													(1,000,065	)				(1,000,065	)
Net income													4,210,911					4,210,911
Adjustment to statutory reserve											616,256		(616,256	)				—
Foreign currency translation adjustments																185,402		185,402

BALANCE, June 30, 2006		10,125,000	$	10,125	$	3,915,871	$	(1,925,996	)	$	1,001,088	$	3,470,940		$	185,402	$	6,657,430

Issuance of common stock		8,750,000		8,750		15,247,678												15,256,428
Capital contribution received								1,925,996										1,925,996
Net income													7,149,126					7,149,126
Adjustment to statutory reserve											734,396		(734,396	)				—
Foreign currency translation adjustments																641,596		641,596

BALANCE, June 30, 2007		18,875,000	$	18,875	$	19,163,549	$	—		$	1,735,484	$	9,885,670		$	826,998	$	31,630,576

Issuance of common stock																		—
Exercised warrants		219,805		220		506,523												506,743
Option issued to employees						317,636												317,636
Net income													10,410,325					10,410,325
Adjustment to statutory reserve											1,159,418		(1,159,418	)				—
Foreign currency translation adjustments																3,890,123		3,890,123

BALANCE, June 30, 2008		19,094,805	$	19,095	$	19,987,708	$	—		$	2,894,902	$	19,136,577		$	4,717,121	$	46,755,403

F-4

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2008, 2007 AND 2006

	2008			2007			2006

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,410,325		$	7,149,126		$	4,210,911
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		2,964,678			2,239,157			1,478,734
Amortization		57,254			42,644			41,454
Bad debt expense		93,557			271,602			114,780
Stock option expense		317,636			—			—
(Gain) loss on building and equipment disposal		(169,726	)		186,470			—
Gain on disposal of land use right		—			(1,647,833	)		—
Equity in income of unconsolidated investment		(603,261	)		(131,420	)		(41,635	)
Change in operating assets and liabilities:
Accounts receivable		(1,127,048	)		(2,288,351	)		(261,286	)
Notes receivable		(2,274,840	)		(591,936	)		(126,992	)
Other receivables		1,994,157			(582,008	)		1,567
Inventories		(304,476	)		(2,394,250	)		173,225
Prepayments		(165,981	)		99,957			(28,710	)
Prepayments - related party		—			1,409,944			301,037
Accounts payable		(7,730,549	)		1,773,031			176,458
Accounts payable - related party		(320,156	)		390,986			200,660
Accrued liabilities		(781,690	)		130,238			(65,014	)
Other payable		(906,285	)		410,174			166,860
Customer deposit		(74,646	)		492,586			201,045
Taxes payable		2,201,518			1,385,613			(14,792	)
Net cash provided by operating activities		3,580,467			8,345,730			6,528,302

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in affiliate		—			(909,439	)		(124,020	)
Proceeds from building and equipment disposal		139,163			—			—
Acquisition of plant and equipment		(14,517,157	)		(11,041,561	)		(6,232,594	)
Acquisition of intangible assets		(296,893	)		(949,900	)		—
Advances on plant and equipment purchase		—			(7,225,790	)		(1,155,999	)
Loan to related party		—			(3,817,948	)		—
Repayments on loan to related party		4,590,136			—			—

Net cash used in investing activities		(10,084,751	)		(23,944,638	)		(7,512,613	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash		(524,140	)		(2,024,720	)		(279,045	)
Borrowings on notes payable - banks		11,703,650			8,710,120			12,201,088
Principal payments on notes payable - banks		(10,739,820	)		(7,173,040	)		(10,743,853	)
Borrowings on short term loans		21,383,257			24,785,415			8,979,048
Principal payments on short term loans		(19,758,515	)		(15,178,665	)		(8,358,948	)
Borrowings on employee loans		1,458,353			384,224			431,111
Principal payments on employee loans		(778,444	)		(458,632	)		(113,060	)
Borrowings on employee loan - officer		53,605			1,281			—
Principal payments on employee loan - officer		—			(96,580	)		—
Borrowings on third party loan		3,139,855			251,378			57,319
Principal payments on third party loan		(2,868,909	)		—			—
Borrowings on long term loan		—			—			992,160
Principal payments on long term loan		(399,301	)		(1,549,889	)		(868,140	)
Proceeds from issuance of common stock		506,743			15,256,428			—
Payments of amounts due officer		—			(1,925,996	)		—
Proceeds from capital contribution receivable		—			696,371			—
Dividends paid to shareholders		—			—			(1,664,503	)
Net cash provided by financing activities		3,176,334			21,677,695			633,177

EFFECTS OF EXCHANGE RATE CHANGE IN CASH		313,117			(160,805	)		25,408

(DECREASE) INCREASE IN CASH		(3,014,833	)		5,917,982			(325,726	)

CASH, beginning of year		6,420,439			502,457			828,183

CASH, end of year	$	3,405,606		$	6,420,439			502,457

SUPPLEMENTAL DISCLOSURE
Cash paid for Interest, net of capitalized interest	$	1,901,531		$	1,270,418		$	555,572
Cash paid for Income taxes	$	14,809		$	125,782		$	—
Non-cash investing and financing activities -
Acquisition of land use right in exchange for other receivable	$	692,304		$	—		$	—
Non cash reclassification transactions of plant and equipments:
Acquisition of plant and equipment through assets other than plant and equipments	$	3,366,350		$	-		$	-
Reclassification of advances on equipment purchase to plant and equipment upon receipt of purchase	$	7,793,173		$	1,183,010		$	-
Acquisition of plant and equipment through liabilities	$	12,141,833		$	4,698,714		$	-

F-5

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008

Note 1 - Organization background and principal activities

Shengtai Pharmaceutical, Inc. (the “Company”), formerly known as West Coast Car Company, was incorporated in March 2004 in the state of Delaware as West Coast Car Company.

On May 15, 2007, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with the shareholders of Shengtai Holding, Inc. (“SHI”). Contemporaneously, on May 15, 2007, the Company entered into and consummated a share purchase agreement (the “Share Purchase Agreement”) with nineteen accredited investors (the “Purchasers”). Pursuant to the Share Exchange Agreement, Qingtai Liu and Chenghai Du, shareholders of all the issued and outstanding shares of common stock of SHI, exchanged all SHI’s common stock for 9,125,000 newly-issued shares of the Company. Pursuant to the Share Purchase Agreement, the Purchasers acquired 8,750,000 shares of common stock and 4,375,000 attached warrants for $2.00 per unit (or an aggregate purchase price of $17,500,000) and for total net proceeds of $15,256,428. The exercise price of the warrants is $2.60 per share and the term of the warrants is five years. As a result of the Share Exchange Agreement and the Share Purchase Agreement, the Company acquired all of the outstanding capital stock of SHI. Because SHI owns 100% of Weifang Shengtai Pharmaceutical Co., Ltd (hereinafter known as “Weifang Shengtai”), Weifang Shengtai is now an indirect wholly-owned subsidiary of the Company. For accounting purposes, the acquisition of SHI has been treated as a recapitalization of SHI with SHI as the acquirer. The historical financial statements prior to May 15, 2007, are those of SHI.

In conjunction with the Share Purchase Agreement, Qingtai Liu, the controlling shareholder and Chief Executive Officer of the Company, placed an aggregate 5,000,000 shares of common stock in an escrow account held with Tri-State Title & Escrow, LLC upon closing of the Share Purchase Agreement. Pursuant to the Share Purchase Agreement, one half of the escrowed shares are to be released to the Purchasers on a pro-rated basis if the audited consolidated financial statements of the Company prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) do not reflect after-tax net income of at least $7,000,000 or fully diluted earnings per share of $0.33 for the fiscal year ended June 30, 2007. If the audited consolidated financial statements of the Company prepared in accordance with US GAAP do not reflect an after-tax net income of at least $9,000,000 or fully diluted earnings per share of $0.43 for the fiscal year ending June 30, 2008, the second half of the escrowed shares will be distributed on a pro-rated basis to the Purchasers. The Company determined that the thresholds for the two years ended June 30, 2008 and 2007 have been met.

F-6

SHI was incorporated in the state of New Jersey on February 27, 2006. The Company, through its Chinese subsidiary, Weifang Shengtai, manufactures and distributes raw drug materials (e.g., glucose, dehydrated glucose) and drug supplements (e.g., starch, dextrin, polyacrylic acid resin). The Company’s primary business operations are conducted in the People’s Republic of China (“PRC”).

Weifang Shengtai was established in Changle County, Weifang City, Shandong Province, in People’s Republic of China on February 4, 1999. Qingtai Liu and his management team were the original shareholders of Weifang Shengtai.

On April 19, 2006, pursuant to a shareholders’ resolution, 37 Chinese shareholders (“Original Shareholders”) of Weifang Shengtai transferred their 17.95% interest in the Company to Qingtai Liu for RMB 5,628,880 ($703,610). On June 3, 2006, the equity exchange was approved by the local branch of the Ministry of Commerce (“MOC”) in Weifang City.

On June 20, 2006, SHI signed an agreement to acquire Bio-One Corporation’s (“Bio-One”) 51% interest in Weifang Shengtai and Qingtai Liu’s 49% interest in Weifang Shengtai. Qingtai Liu, a founding shareholder of Weifang Shengtai, sold his 49% interest in Weifang Shengtai to SHI for RMB 15,000,000 (USD $1,925,996), and this amount was paid in May 2007. Bio-One sold its 51% interest in Weifang Shengtai to SHI for $1,000,000 in cash and the return of 4,180,000 Series A preferred stock of Bio-One owned by Qingtai Liu. Weifang Shengtai became a wholly foreign owned entity (“WFOE”) and obtained the approval of the local branch of the MOC in Weifang City on June 21, 2006. The business term is 20 years beginning on February 10, 2004, the date Bio-One acquired its 51% in Weifang Shengtai. In accordance with the laws governing foreign acquisitions of a Chinese registered company, SHI contributed the $1,925,996 as required to Weifang Shengtai, and as a result of this transaction, SHI exercised control over Weifang Shengtai.

On May 26, 2007, Weifang Shengtai increased its registered capital from $3,920,000 to $15,000,000. In May and June 2007, SHI contributed $11,080,000 towards the additional registered capital. This transaction was approved by the local branch of the MOC in Weifang City and the Company obtained a new business license on July 16, 2007, for a term of 20 years.

Note 2 - Summary of significant accounting policies

The reporting entity

The consolidated financial statements of Shengtai Pharmaceutical Inc. and Subsidiaries reflect the activities of the parent and its wholly-owned subsidiaries SHI and Weifang Shengtai. The purchase of SHI has been accounted for as a reverse acquisition and a recapitalization. The assets and liabilities of SHI were transferred at historical cost under the equity structure of the Company due to the reverse acquisition on May 15, 2007. The consolidated financial statements have been presented as if the acquisition occurred at June 30, 2005. The Company recorded all normal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented.

F-7

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All material inter-company transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made in the preparation of the Company’s consolidated financial statements relate to the assessment of the carrying values of accounts receivable. Actual results could be materially different from these estimates upon which the carrying values were based.

Foreign currency translation

The reporting currency of the Company is the US dollar. The Company uses the Chinese Renminbi (“RMB”) as its functional currency. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation,” results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rates at the balance sheet dates, and equity is translated at the historical exchange rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding accounts on the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of shareholders’ equity. Translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments amounted to $4,717,121 and $826,998 as of June 30, 2008 and 2007, respectively. Assets and liabilities were translated at 6.85 RMB and 7.60 RMB to $1.00 at June 30, 2008 and 2007, respectively. The average translation rates applied to consolidated statements of income for the years ended June 30, 2008, 2007 and 2006 were 7.26 RMB, 7.81 RMB and 8.06 RMB to $1.00 US dollar, respectively.

Revenue recognition

The Company recognizes revenue when the goods are delivered, title has passed, pricing is fixed, and collection is reasonably assured. Sales revenue represents the invoiced value of goods, net of value-added tax (“VAT”), and estimated returns of product from customers. Most of the Company’s products sold in the PRC are subject to a VAT rate of 17% of the gross sales price or at a rate approved by the Chinese local government. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their finished products and certain freight expenses. We allow our customers to return products only if our product is later determined by us to be ineffective. Based on our historical experience over the past three years, product returns have been insignificant throughout all of our product lines. Therefore, we do not estimate deductions or allowance for sales returns. Sales returns are taken against revenue when products are returned from customers. Sales are presented net of any discounts given to customers.

F-8

Shipping and handling

Shipping and handling cost related to costs of goods sold are included in selling, general and administrative expenses. For the years ended June 30, 2008, 2007, and 2006, shipping and handling costs amounted to $3,097,843, $1,927,118, and $1,980,055, respectively,

Financial instruments

SFAS No. 107 (“SFAS 107”), “Disclosures about Fair Value of Financial Instruments” requires disclosure of the fair value of financial instruments held by the Company. SFAS 107 defines the fair value of financial instruments as the amount at which the instrument could be exchanged in a current transaction between willing parties. The Company considers the carrying amount of cash, accounts receivable, notes receivable, other receivables, prepayments, accounts payable, other payables, accrued liabilities, customer deposits, taxes payable, and loans to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

Stock-based compensation

The Company records stock-based compensation expense pursuant to SFAS No. 123R (“SFAS 123R”), “Share Based Payment.” The Company estimates the fair value of the award using the Black-Scholes option pricing model. Under SFAS 123R, the Company’s expected volatility assumption is based on the historical volatility of Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

Stock-based compensation expense is recognized based on awards expected to vest, and there were no estimated forfeitures as the Company has a short history of issuing options. FAS 123R requires forfeitures to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates.

Earnings per share

The Company reports earnings per share in accordance with the provisions of SFAS No. 128 (“SFAS 128”), "Earnings Per Share." SFAS 128 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock.

F-9

The following is a reconciliation of the basic and diluted earnings per share computation for the years ended June 30, 2008, 2007, and 2006:

	2008		2007		2006
N Net income for earnings per share	$	10,371,154	$	7,149,126	$	4,210,911

Weighted average shares used in basic computation		18,993,789		11,251,712		10,125,000
Diluted effect of warrants		880,697		225,833		—
Weighted average shares used in diluted computation		19,874,486		11,477,545		10,125,000

Earnings per share:
Basic	$	0.55	$	0.64	$	0.42
Diluted	$	0.52	$	0.62	$	0.42

At June 30, 2008 and 2007, all outstanding warrants were included in the calculation of diluted earnings per share. At June 30, 2006, the Company did not have any outstanding warrants or stock options.

Cash and cash equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash and cash equivalents.

Restricted cash

The Company, through its bank agreement, is required to keep certain amounts on deposit that are subject to withdrawal restrictions. These amounts were $6,565,500 and $5,628,500 as of June 30, 2008 and 2007, respectively.

In accordance with the Escrow Agreement and the Share Purchase Agreement by and among Shengtai Holding Inc., West Coast Car Company, Chinamerica Fund LLP, and Tri-State Title & Escrow, LLC (the “Escrow Agent”), the Company was required to deposit with the Escrow Agent $5,500,000 immediately on the Closing Date of the Share Purchase Agreement. This fund can only be disbursed when certain criteria are met. As of June 30, 2008 and June 30, 2007, the undisbursed amounts were $198,000 and $500,000, respectively, and these are included in restricted cash in the consolidated balance sheets.

Accounts receivable

In the normal course of business, the Company extends credit to its customers without requiring collateral or other security interests. Management reviews its accounts receivables at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. The Company estimates this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change, and can have an impact on collections and the Company’s estimation process. These impacts may be material.

F-10

Certain accounts receivable amounts are charged off against allowances after designated period of collection efforts. Subsequent cash recoveries are recognized as income in the period when they occur.

The activities in the allowance for doubtful accounts are as follows for the years ended June 30, 2008 and 2007:

	2008			2007
Beginning allowance for doubtful accounts	$	431,178		$	357,970
Additions charged to bad debt expense		93,557			271,602
Write-off charged against the allowance		(129,130	)		(217,838	)
Foreign currency translation adjustments		45,096			19,444
Ending allowance for doubtful accounts	$	440,701		$	431,178

Concentrations of risk

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC's economy.

The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among others.

Management believes the credit risk on bank deposits is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies, or state-owned banks in China. Cash includes cash on hand and demand deposits in accounts maintained with state-owned banks within the PRC and the United States of America. Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash. The Company maintains cash deposits in financial institutions that exceed the amounts insured by the U.S. government. Balances at financial institutions or state owned banks within the PRC are not covered by insurance. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At June 30, 2008 and 2007, the Company’s bank balances exceeded government insured limits by approximately $10,175,000 and $12,130,000, respectively. The Company has not experienced, nor does it anticipate, nonperformance by these institutions.

The Company’s concentrations of credit risk are primarily in trade accounts receivable and accounts payable. There were no customers that individually comprised 10% or more of the revenues or trade accounts receivable at June 30, 2008, and 2007. For the year ended June 30, 2008, two vendors accounted for approximately 23% of the Company’s total purchases. As of June 30, 2008, accounts payable for these vendors amounted to $362,807. For the years ended June 30, 2007 and 2006, one vendor accounted for approximately 22% and 77%, respectively, of the Company’s total purchases. There were no accounts payable balance for this vendor as of June 30, 2007.

F-11

For export sales, management frequently requires significant down payments or letter of credit prior to shipment. For these sales, the Company maintains export credit insurance to protect against the risk that the overseas customers may default on settlement.

The following table summarizes financial information for the years ended June 30, 2008, 2007 and 2006, concerning the Company’s revenues based on geographic area:

Revenue	2008		2007		2006
China	$	81,160,283	$	46,607,204	$	31,282,456
International		9,710,940		5,099,011		4,746,723
Total	$	90,871,223	$	51,706,215	$	36,029,179

Inventories

Inventories are stated at the lower of cost (weighted average basis) or market and consist of the following as of June 30, 2008 and 2007:

	2008		2007
Raw materials	$	1,409,577	$	2,297,901
Work-in-progress		1,688,161		1,130,900
Finished goods		1,941,540		1,020,466
Total	$	5,039,278	$	4,449,267

The Company reviews its inventory periodically for possible obsolescence or to determine if any reserves are necessary. As of June 30, 2008 and 2007, the Company determined that no reserves were necessary.

Prepayments

Prepayments represent partial payments or deposits for inventory and property and equipment purchases. Certain of the prepayments are for those anticipated purchases, primarily property and equipment, that are scheduled to occur beyond the one-year time frame.

F-12

Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation. Additions and improvements to property and equipment accounts are recorded at cost. Maintenance, repairs, and minor renewals are charged directly to expense as incurred. Major additions and betterments to property and equipment accounts are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with 3% residual value.

Estimated useful lives of the assets are as follows:

	Estimated Useful Life
Buildings and improvements		5-20	years
Machinery and equipment		5-10	years
Automobile facilities		5-10	years
Electronic equipment		5-7	years

Impairment of long-lived assets

Long-lived assets of the Company are reviewed periodically, or more often if circumstances dictate, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. As of June 30, 2008, the Company expects these assets to be fully recoverable.

Investment in unconsolidated affiliate

Equity method investments are recorded at original cost and adjusted to recognize the Company’s proportionate share of the investee’s net income or losses, additional contributions made and distributions received, and amortization of basis differences. The Company recognizes a loss if it is determined that other than temporary decline in the value of the investment exists.

Intangible assets

Intangible assets are primarily comprised of land use rights. All land in the PRC is owned by the Chinese government. However, the government grants “land use rights” for terms ranging from 20 to 50 years. From March 2000 to June 2007, the Company acquired various land use rights for approximately $2,243,000. The Company obtained another land use right in July 2007 for approximately $314,000. In May 2008, the Company paid approximately $734,000 to a local government which enabled the land use right to be classified from industrial use to commercial use. The Company amortizes the cost of land use rights over the usage terms using the straight-line method.

On June 30, 2007, the Company sold a land use right at an auction due to relocation of one of the Company’s manufacturing plants. At the time of the sale, the net book value of the land use right was $306,984, and the sale price for the land use right was $1,954,817, for a gain of approximately $1,648,000. As of June 30, 2008, total proceeds had been received.

F-13

Intangible assets of the Company are reviewed at least annually, more often if circumstances dictate, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. As of June 30, 2008, the Company determined that there had been no impairment. For the years ended June 30, 2008, 2007 and 2006, amortization expense relating to these intangible assets amounted to $57,254, $42,644 and $41,454 respectively.

Income taxes

The Company accounts for income taxes in accordance with SFAS N o. 109 (“SFAS 109”), “Accounting for Income Taxes.” Under the asset and liability method as required by SFAS 109, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under SFAS 109, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. As of June 30, 2008 and 2007, the Company did not have any deferred tax assets or liabilities, and as such, no valuation allowances were recorded at June 30, 2008 and 2007.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109," which clarifies the accounting and disclosure for uncertain tax positions. This interpretation is effective for fiscal years beginning after December 15, 2006, and the Company has implemented this interpretation as of July 1, 2007. FIN 48 prescribes a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Under FIN 48, evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

The adoption of FIN 48 at July 1, 2007, did not have a material effect on the Company's consolidated financial statements.

The Company’s operations are subject to income and transaction taxes in the United States and in the PRC jurisdictions. Significant estimates and judgments are required in determining the Company’s worldwide provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations, and as a result the ultimate amount of tax liability may be uncertain. However, the Company does not anticipate any events that would lead to changes to these uncertainties.

F-14

Value Added Tax

Enterprises or individuals who sell products, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with Chinese laws. The standard value added tax rate is 17% of the gross sales price, however, for the Company’s corn plumules products, the VAT rate is 13%. A credit is available whereby VAT paid on the purchases of semi-finished products, raw materials used in the production of the Company’s finished products, and payment of freight expenses can be used to offset the VAT due on sales of the finished products.

VAT on sales and VAT on purchases amounted to $13,794,406 and $9,840,077, respectively, for the year ended June 30, 2008. For the year ended June 30, 2007, VAT on sales and VAT on purchases amounted to $7,453,346 and $6,991,599, respectively. For the year ended June 30, 2006, VAT on sales and VAT on purchases amounted to $5,571,553 and $4,545,708, respectively. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the Chinese government. VAT taxes are not impacted by the income tax holiday in the PRC.

Guarantees

From time to time, the Company guarantees the debt of others unrelated to the Company. Pursuant to FIN 45, “Guarantor’s Accounting for and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others,” the Company must record guarantees at the fair value of the expected future payments. However, the Company estimates that it will not be required to make any payments under these guarantees based on the past experience and the financial condition of the companies to which the guarantees were made.

Recently issued accounting pronouncement s

In September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), Fair Value Measurements. SFAS 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of this statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. SFAS 157 is effective for financial statements for fiscal years beginning after November 15, 2007, with earlier adoption permitted. The Company is evaluating the impact, if any, that the adoption of this statement will have on its consolidated results of operations and financial position.

On February 14, 2008, the FASB issued FASB Staff Position No. FAS 157-1 ("FSP FAS 157-1"), "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13". FSP FAS 157-1 does not apply under FASB Statement No. 13 (“Statement 13”), "Accounting for Leases," and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under Statement 13. This scope exception does not apply to assets acquired and liabilities assumed in a business combination that are required to be measured at fair value under SFAS No. 141 or SFAS No. 141R, regardless of whether those assets and liabilities are related to leases.

On February 12, 2008, the FASB issued FASB Staff Position No. FAS 157-2 ("FSP FAS 157-2"), "Effective Date of FASB Statement No. 157." With the issuance of FSP FAS 157-2, the FASB agreed to: (a) defer the effective date in SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), and (b) remove certain leasing transactions from the scope of SFAS No. 157. The deferral is intended to provide the FASB time to consider the effect of certain implementation issues that have arisen from the application of SFAS No. 157 to these assets and liabilities.

F-15

In February 2007, the FASB issued SFAS No. 159, (“SFAS 159”), “The Fair Value Option for Financial Assets and Financials Liabilities — Including an Amendment of FASB Statement No. 115.” This standard permits measurement of certain financial assets and financial liabilities at fair value. If the fair value option is elected, the unrealized gains and losses are reported in earnings at each reporting date. Generally, the fair value option may be elected on an instrument-by-instrument basis, as long as it is applied to the instrument in its entirety. The fair value option election is irrevocable, unless a new election date occurs. SFAS 159 requires prospective application and also establishes certain additional presentation and disclosure requirements. The standard is effective as of the beginning of the fiscal year that begins after November 15, 2007. The Company is currently evaluating the impact, if any, that the adoption of SFAS 159 will have on its consolidated results of operations or financial position.

In December 2007, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 110 (“SAB 110”). SAB 110 amends and replaces Question 6 of Section D.2 of Topic 14, Share-Based Payment of the Staff Accounting Bulletin series. Question 6 of Section D.2 of Topic 14 expresses the views of the staff regarding the use of the “simplified” method in developing an estimate of expected term of “plain vanilla” share options and allows usage of the “simplified” method for share option grants prior to December 31, 2007. SAB 110 allows public companies which do not have historically sufficient experience to provide a reasonable estimate to continue use of the “simplified” method for estimating the expected term of “plain vanilla” share option grants after December 31, 2007. The Company currently uses the “simplified” method to estimate the expected term for share option grants as the Company does not have enough historical experience to provide a reasonable estimate. The Company intends on using the “simplified” method until the Company has enough historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. The Company adopted SAB 110 on January 1, 2008, and the Company is currently assessing the impact, if any, of this adoption.

In December 2007, the FASB issued SFAS No. 141(R) "Business Combinations" ("SFAS 141R"). The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting as well as requiring the expensing of acquisition-related costs as incurred. Furthermore, SFAS 141R provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company is evaluating the impact, if any, that the adoption of this statement will have on its consolidated results of operations or financial position.

In December 2007, the FASB issued SFAS No. 160 (“SFAS 160”), “Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51.” SFAS 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It is intended to eliminate the diversity in practice regarding the accounting for transactions between equity and noncontrolling interests by requiring that they be treated as equity transactions. Further, it requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. SFAS 160 also establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation, requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated, requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary, among others. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008, with early adoption permitted, and it is to be applied prospectively. SFAS 160 is must be applied prospectively as of the beginning of the fiscal year in which it is initially applied, except for the presentation and disclosure requirements, which must be applied retrospectively for all periods presented. The Company has not yet evaluated the impact that SFAS 160 will have on its consolidated financial position or results of operations.

F-16

In March 2008, the FASB issued SFAS No. 161 ("SFAS 161"), "Disclosures about Derivative Instruments and Hedging Activities." SFAS 161 is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable financial statement users to better understand the effects of derivatives and hedging on an entity's financial position, financial performance and cash flows. The provisions of SFAS 161 are effective for interim periods and fiscal years beginning after November 15, 2008. The Company does not anticipate that the adoption of SFAS 161 will have a material impact on its consolidated results of operations or financial position.

In May 2008, the FASB issued SFAS No. 162 (“SFAS 162”), "The Hierarchy of Generally Accepted Accounting Principles." SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with GAAP for nongovernmental entities. SFAS 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles." The Company does not expect the adoption of SFAS 162 will have a material impact on its consolidated results of operations or financial position.

On May 9, 2008, the FASB issued FASB Staff Position No. APB 14-1 ("FSP APB 14-1"), "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)." FSP APB 14-1 clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants." Additionally, FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company has not yet evaluated the impact that FSP APB 14-1 will have on its consolidated results of operations or financial position.

In June 2008, the FASB issued Emerging Issues Task Force Issue 07-5 (“EITF 07-5”), “Determining whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock.” EITF No. 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS 133 “Accounting for Derivatives and Hedging Activities” specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company’s own stock and (b) classified in stockholders’ equity in the statement of financial position would not be considered a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the SFAS 133 paragraph 11(a) scope exception. This standard triggers liability accounting on all options and warrants exercisable at strike prices denominated in any currency other than the functional currency of the operating entity in the PRC (Renminbi). Management is currently evaluating the impact of adoption of EITF 07-5 on the accounting for related warrants transactions.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation with no impact on the previously reported net income or cash flows.

F-17

Note 3 - Plant and equipment

Plant and equipment consist of the following at June 30, 2008 and 2007:

	2008			2007
Buildings and improvements	$	6,343,954		$	5,272,190
Machinery and equipment		37,239,847			22,257,978
Automobile facilities		562,039			487,319
Electronic equipment		368,550			307,391
Construction-in-progress		36,373,688			9,055,482
Total		80,888,078			37,380,360
Accumulated depreciation		(10,945,057	)		(7,202,286	)
Total	$	69,943,021		$	30,178,074

Construction-in-progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction-in-progress until such time as the assets are completed and placed into service. Depreciation expense for the years ended June 30, 2008, 2007 and 2006 amounted to $2,964,678, $ 2,239,157 and $1,478,734, respectively. Interest costs totaling $598,953, $759,372 and $189,904 was capitalized into construction-in-progress for the years ended June 30, 2008, 2007 and 2006 respectively.

Note 4 - Investment in unconsolidated affiliate

On September 16, 2003, the Company entered into a joint venture partnership with Weifang City Investment Company and Changle Century Sun Paper Industry Co., Ltd, and formed Changle Shengshi Redian Co., Ltd (“Changle Shengshi”). Changle Shengshi was incorporated in Weifang City, Shandong Province, PRC. Changle Shengshi’s principal activity is to produce and sell electricity and heat. The Company accounts for this investment under the equity method of accounting.

On April 12, 2005, the Company’s ownership percentage in Changle Shengshi was reduced from 30% to 20% as a result of an additional investment to Changle Shengshi by another party. This did not have any material impact on the Company’s consolidated financial statements.

Summarized financial information of Changle Shengshi is as follows as of June 30, 2008 and 2007:

	2008		2007
Current assets	$	14,117,813	$	8,065,168
Non-current assets		27,231,806		23,027,549
Total assets		41,349,619		31,092,717

Current liabilities		20,333,700		14,137,526
Non-current liabilities		2,976,360		3,576,800
Shareholders' equity		18,039,559		13,378,391
Total liabilities and shareholders' equity	$	41,349,619	$	31,092,717

F-18

Summarized financial information of Changle Shengshi is as follows for the years ended June 30, 2008, 2007, and 2006:

	2008			2007			2006
Net sales	$	31,653,752		$	17,366,341		$	7,622,505
Gross profit	$	6,247,654		$	3,586,157		$	1,249,000
Income before taxes	$	4,571,573		$	2,308,837		$	431,747
Net income	$	3,016,305		$	1,546,921		$	430,682

Company share of income		603,261			309,384			86,136
Elimination of intercompany profit		(331,022	)		(177,964	)		(44,501	)
Company's share of net income	$	272,239		$	131,420		$	41,635

Note 5 - Related party transactions

Through September 2006, the Company purchased certain volume of starch from Shouguang Shengtai Starch Co. Ltd. (“Shouguang Shengtai”), an entity in which Qingtai Liu, the Company’s Chief Executive Officer, has a 40% interest. From September 2006, the Company began its own production of starch, and no additional purchases were made from Shouguan Shengtai for the procurement of starch. As Shouguang Shengtai is partially owned by the Company’s Chief Executive Officer, prepayments made by the Company has been reclassified to other receivable - related party, as the balance was to be refunded by Shouguang Shengtai. As of June 30, 2007, other receivable - related party was $992,449. For the years ended June 30, 2007 and 2006, the Company made purchases of approximately from Shouguang Shengtai $7,652,465 and $13,794,612, respectively, which was approximately 22% and 77% of the Company’s total purchases of raw materials. For the year ended June 30, 2008, the Company did not make any purchases from Shouguang Shengtai.

In connection with the Company’s purchase of Qingtai Liu’s 49% interest in Weifang Shengtai as described in Note 1, and the 17.95% ownership interest transfer from the Original Shareholders of Weifang Shengtai to Qingtai Liu on April 19, 2006, Qingtai Liu assumed the liabilities of the Original Shareholders’ capital contribution and was entitled to contribute this amount as a capital contribution to the Company. On December 20, 2007, Qingtai Liu repaid the remaining balance of $1,229,625.

The Company’s utilities are partially provided by Changle Shengshi. (See Note 4). As of June 30, 2008 and 2007, the Company’s accounts payable due to Changle Shengshi was approximately $715,000 and $950,000, respectively, which related to a portion of the Company’s utilities being provided by Changle Shengshi. The utilities expense amounted to approximately $9,852,000, $4,958,000 and $1,706,000 for the years ended June 30, 2008, 2007 and 2006, respectively.

F-19

As of June 30, 2008 and 2007, the Company’s receivables from two loan contracts with Changele Shengshi were as follows:

	June 30, 2008		June 30, 2007
Due on November 19, 2007, unsecured, 7.95% interest rate per annum	$	—	$	657,500
Due on September 14, 2009, unsecured, 7.60% interest rate per annum		437,700		394,500
Total	$	437,700	$	1,052,000

Periodically, the Company advances monies to Changle Shengshi for temporary cash flow purposes. This transaction is recurring in nature and the Company does not charge interest on these advances, which are due on demand. As of June 30, 2007, total receivable due from Changle Shengshi was $1,499,207. As of June 30, 2008, the Company did not have any amounts due from Changle Shengshi.

The following table summarizes other receivable - related parties as of June 30, 2008 and 2007 is as follows:

	2008		2007
Changle Shengshi Redian Co., Ltd	$	—	$	1,499,207
Shouguang Shengtai Starch Co. Ltd		—		992,449
Total	$	—	$	2,491,656

Note 6 - Debt

Short term loans

Short term loans represent amounts due to various banks which are normally due within one year, and these loans can be renewed with the banks. As of June 30, 2008 and 2007, the Company’s short term bank loans consisted of the following:

	2008		2007
Loan from Bank of China, due various dates from January 2008 to June 2009; monthly interest only payments; interest rates ranging from 7.47% to 8.96% per annum, guaranteed by an unrelated third party and secured by certain properties.	$	13,656,240	$	10,993,400

Loan from Industrial and Commercial Bank of China, due various dates from August 2007 to May 2009; monthly interest only payments; interest rates ranging from 7.47% to 8.96% per annum, guaranteed by an unrelated third party and secured by certain properties.	$	3,895,530	$	3,945,000

Loan from Agriculture Bank of China, due various dates from February 2008 to February 2009; monthly interest only payments; interest rate of 8.96% per annum, guaranteed by an unrelated third party and secured by certain properties	$	2,188,500	$	1,959,350

Loan from Communication Bank, due July 2007; monthly interest only payments; interest rate of 7.2% per annum, guaranteed by an unrelated third party.	$	—	$	1,972,500

Loan from Commercial Bank, due July 2008; monthly interest-only payments; interest rate at 8.019% per annum, guaranteed by an unrelated third party, unsecured.	$	1,459,000	$	—

Loan from ShangHai PuFa Bank, due October 2008; monthly interest-only payments; interest rate of 8.384% per annum, guaranteed by an unrelated third party, unsecured.	$	1,459,000	$	—

Total	$	22,658,270	$	18,870,250

F-20

The loans are secured by buildings and improvements, machinery and equipment, and land use rights with carrying values as follows:

	June 30, 2008
Buildings and improvements	$	4,637,104
Machinery and equipment		4,150,330
Land use rights		4,860,224
Total	$	13,647,658

Notes payable - banks

Notes payable represent amounts due to various banks which are normally due within one year, and these notes can be renewed with the banks. As of June 30, 2008 and 2007, the Company’s notes payables consisted of the following:

	2008		2007
Bank of China, due November 2008, 0.05% transaction fee, restricted cash required 100% of loan amount, guaranteed by an unrelated third party.	$	729,500	$	4,997,000
Industrial and Commercial Bank of China, due in September 2008, 0.05% transaction fee, restricted cash required 50% of loan amount, guaranteed by an unrelated third party.		4,377,000		3,945,000
Shenzhen Development Bank, due in December 2008, 0.05% transaction fee, restricted cash required 50% of loan amount, guaranteed by an unrelated third party.		4,377,000		—
Shenzhen Development Bank, due in December 2008, 0.05% transaction fee, restricted cash required 100% of loan amount, guaranteed by an unrelated third party.		1,459,000		—
Total	$	10,942,500	$	8,942,000

Employee loans

From time to time, the Company borrows monies from certain employees for cash flow purposes of the Company. These loans do not require collateral and bear interest at 7.2% for the first six months, and then 10.8% thereafter until the full principal amounts are paid by the Company and the principal is due upon demand. Employee loans amounted to $1,382,287 and $596,516 as of June 30, 2008 and June 30, 2007, respectively. Interest expense amounted to $105,672, $45,856, and $56,425 for the years ended June 30, 2008, 2007, and 2006, respectively. These loans are payable upon demand.

F-21

Employee l oan - officer

From time to time, the Company has borrowed monies from Qingtai Liu for cash flow purposes of the Company. The loan does not require collateral and bear interest at 7.2% for the first six months, and then 10.8% until the full principal amount is paid by the Company and the principal is due upon demand. Employee loan from officer amounted to $53,605 and $0 as of June 30, 2008 and June 30, 2007, respectively. Interest expense was de minimis on this loan for the years ended June 30, 2008, 2007, and 2006.

Third party loan

From time to time, the Company borrowed money from an unrelated individual for use in operations. The loan does not require collateral and bears interest at 7.2% for the first six months, and then 10.8% until the full principal amount is paid by the Company . The principal is due upon demand. Balance on this loan as of June 30, 2008 and 2007 was $640,228 and $318,274, respectively.

Long term loan - current portion

Long term loan - current portion represents an amount due to a bank which was normally due within one year. During the year ended June 30, 2008, the outstanding amount was paid in full. As of June 30, 2008 and 2007, long term loan - current portion was:

		June 30, 2008				June 30, 2007
Agricultural Credit Union, interest at 7.84% per annum, due May 2008		$	—			$	381,350

Interest

Total interest expense, net of capitalized interest, for the years ended June 30, 2008, 2007, and 2006 on all debt, amounted to $1,901,531, $1,270,418, and $555,572 respectively. Interest capitalized into construction-in-progress totaled $598,953, $759,372 and $189,904 for the years ended June 30, 2008, 2007 and 2006, respectively.

Note 7 - Income taxes

The Company is governed by the Income Tax Law of the PRC concerning Foreign Investment Enterprises (“FIEs”) and Foreign Enterprises and various local income tax laws (the “Income Tax Laws”). Under the Income Tax Laws, FIEs are generally subject to an effective income tax of 33% (30% state income taxes plus 3% local income taxes) on income as reported in their statutory financial statements after appropriate tax adjustments, unless the enterprise is located in specially designated regions of cities for which more favorable effective tax rates apply. Upon approval by the PRC tax authorities, FIEs scheduled to operate for a period of 10 years or more and engaged in manufacturing and production may be exempt from income taxes for up to two years, commencing with their first profitable year of operations, after taking into account any losses brought forward from prior years, and thereafter with a 50% exemption for the next three years.

F-22

In February 2004, the Company became a Sino-foreign joint venture. In August 2004, the state government granted the Company income tax exemptions as follows: 100% exemption for the first two years from September 2004 to August 2006, and 50% exemption for years three to five from September 2006 to August 2009. In addition, the Company is located in a Special Economic Zone and the PRC tax authority has offered it with a special income tax rate of 24%. With the approval of the local government, the Company is subject to income taxes at a reduced rate of 12% from September 2006 to August 2009, after the two-year 24% exemption for income taxes until its exemption and reduction periods expire in August 2009.

Beginning on January 1, 2008, the new Enterprise Income Tax (“EIT”) law replaced the existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”).

The key changes were:

a.	The new standard EIT rate of 25% will replace the 33% rate currently applicable to both DES and FIEs, except for High Tech companies who pay a reduced rate of 15%;

b.	Companies established before March 16, 2007, will continue to enjoy tax holiday treatment approved by local government for a grace period of the next five years or until the tax holiday term is completed, whichever is sooner.

The Company’s subsidiary, Weifang Shengtai was established before March 16, 2007, and therefore is qualified to continue to be taxed at the reduced rate as described above until the tax holiday term is completed. Starting on September 1, 2009, the Company will be subject to a 25% income tax rate pursuant to the new income tax laws.

For the years ended June 30, 2008, 2007, and 2006, provision for income taxes was $645,988, $878,836 and $0, respectively,

The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the years ended June 30:

	2008			2007			2006
U.S. statutory rates		34.0	%		34.0	%		34.0	%
Foreign income not recognized in the U.S.		(34.0	)		(34.0	)		(34.0	)
China income taxes		29.0			33.0			33.0
China income tax exemption		(17.0	)		(21.0	)		(33.0	)
Other items (a)		(6.0	)		(1.0	)		-

Applicable income tax rate		6.0	%		11.0	%		-	%

(a) In 2008, the Company received special tax credits from the local government due to government enforced regulation. The Company was a tax-exempt entity until September 2006. As the Company’s fiscal year began in July 2006, the Company was not subject to income taxes for two months for the year-ended June 30, 2007.

The estimated tax savings due to the tax exemption for the years ended June 30, 2008, 2007 and 2006 amounted to $1,468,820, $1,537,963 and $1,389,601, respectively. The net effect on basic earnings per share if income taxes had been applied would decrease basic earnings per share for the years ended June 30, 2008, 2007 and 2006 by $0.08, $0.13 and $0.14 respectively. The net effect on diluted earnings per share if income taxes had been applied would decrease diluted earnings per share for the years ended June 30, 2008, 2007 and 2006 by $0.07, $0.13 and $0.14 respectively.

F-23

Taxes payable

Taxes payable consisted of the following as of June 30, 2008 and 2007:

	2008		2007
VAT payable	$	3,049,000	$	1,273,390
Individual income tax withheld		767		1,316
Income tax payable		1,518,278		764,827
Housing property tax payable		9,903		7,306
Others		53,304		2,093
Total taxes payable	$	4,631,252	$	2,048,932

Note 8 - Dividends

Prior to June 30, 2006, the Board of Directors of Weifang Shengtai approved and declared dividends of $2,468,400. As of June 30, 2008, the Company does not have any outstanding dividends payable. As of, and for the years ended June 30, 2008, 2007 and 2006, the dividends paid or declared by the company to its original shareholders were as follows:

	June 30, 2008		June 30, 2007			June 30, 2006
Dividends payable, beginning	$	—	$	389,216		$	1,000,065
Dividends declared		—		—			1,000,065
Dividends paid		—		(389,216	)		(1,664,503	)
Foreign currency translation adjustment		—		—			53,589
Dividends payable, ending	$	—	$	—		$	389,216

Note 9 - Shareholders’ equity

Warrants

In connection with the Share Purchase Agreement, the 4,375,000 warrants (“Investor Warrants”) carry an exercise price of $2.60 and a 5-year term. The Investor Warrants are callable if the Company’s shares trade at or above $8.00 per share for 20 consecutive trading days and underlying shares are registered for resale. The Investor Warrants contain standard adjustment provisions upon stock dividend, stock split, stock combination, recapitalization, and a change of control transaction.

F-24

Also in connection with the Share Purchase Agreement, the Company issued 218,750 warrants (“Placement Agent Warrants”) to Brill Securities, the Placement Agent. These Placement Agent Warrants have the same terms as the Investor Warrants. These warrants were issued on August 8, 2007.

Concurrent with the offering related to the Share Purchase Agreement, the Company issued 75,000 warrants to Chinamerica Fund, LLP and 25,000 warrants to Jeff Jenson (collectively as “Lead Investor Warrants”) to compensate Chinamerica Fund LLP as the lead investor and for Jeff Jenson in assisting in providing the shell of West Coast Car Company. These warrants have the same terms as the Investor Warrants except with an exercise price of $0.01 per share. In June 2008, Jeff Jenson exercised the 25,000 warrants issued to him.

All Investor Warrants, Placement Agent Warrants, and Lead Investor Warrants meet the conditions for equity classification pursuant to SFAS No. 133 “Accounting for Derivatives” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock.” Therefore, these warrants were classified as equity and accounted for as common stock issuance cost.

	Warrants Outstanding		Warrants Exercisable	Weighted Average Exercise Price		Average Remaining Contractual Life
Outstanding, June 30, 2006		—	—	$	—	—
Granted		4,475,000	4,475,000		2.54	5.00
Forfeited		—	—		—	—
Exercised		—	—		—	—
Outstanding, June 30, 2007		4,475,000	4,475,000	$	2.54	4.87
Granted		218,750	218,750		2.60	5.00
Forfeited		—	—		—	—
Exercised		219,805	219,805		2.31	—
Outstanding, June 30, 2008		4,473,945	4,473,945	$	2.54	3.88

Stock options

On January 4, 2008, the Company adopted “Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan” (the “Stock Incentive Plan”). The Company believes that such awards better align the interests of its employee with those of its shareholders. Option awards are generally granted with an exercise price equal to the fair value of the Company’s stock at the date of grant.

F-25

The Company uses the Black-Scholes option pricing model which was developed for use in estimating the fair value of options. Option pricing models require the input of highly complex and subjective variables including the expected life of options granted and the Company’s expected stock price volatility over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of the Company’s employee stock options, it is management’s opinion that the Black-Scholes option valuation model may not provide an accurate measure of the fair value of the Company’s employee stock options. Although the fair value of employee stock options is determined in accordance with SFAS 123R using an option pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model are as follows:

Weighted average risk-free interest rate		3.22	%
Expected term	4 years
Expected volatility		146	%
Expected dividend yield		0	%
Weighted average grant-date fair value per option	$	3.34

The volatility of the Company’s common stock was estimated by management based on the historical volatility; the risk free interest rate was based on Treasury Constant Maturity Rates published by the U.S. Federal Reserve for periods applicable to the estimated life of the options; and the expected dividend yield was based on the current and expected dividend policy. The fair value of the options was based on the Company’s common stock price on the date the options were granted. SFAS 123R allows use of the “simplified” method to determine the term when other information is not available. Because the Company does not have sufficient applicable history of employee stock options activity, the Company uses the simplified method to estimate the life of the options by taking the sum of the vesting period and the contractual life and then calculating the midpoint which is the estimated term of the options.

The stock option activity was as follows for the year ended June 30, 2008:

	Options outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, June 30, 2007		—		—		—
Granted		660,000	$	3.34	$	—
Forfeited		—		—		—
Exercised		—		—		—
Outstanding, June 30, 2008		660,000	$	3.34	$	—

F-26

As the options were first granted in May 2008, there was no stock option activity for the year ended June 30, 2007, and prior.

Following is a summary of the status of options outstanding at June 30, 2008:

	Outstanding Options					Exercisable Options
	Average Exercise Price	Outstanding Options		Average Remaining Contractual Life		Average Exercise Price		Exercisable Options
$	3.34		660,000		4.87	$	3.34		—

Compensation expense from stock options recognized for the year ended June 30, 2008 was $317,636 . There were no such expenses recognized for the years ended June 30, 2007 and 2006.

Note 10 - Commitments and Contingencies

Guarantees

During the year ended June 30, 2008, the Company guaranteed $7.3 million of short term bank loans for an unrelated party, Shangdong Kuangji Group, Inc. (Shangdong Kuangji”). The Company is obligated to perform under the guarantee if Shangdong Kuangji fails to pay principal and interest payments when due. The maximum potential amount of future undiscounted payments under the guarantee is $8.0 million including accrued interest. As of June 30, 2008, the Company did not record a liability for the guarantee because management believes Shangdong Kuangji is current in its payment obligations, and the likelihood of the Company having to make good on the guarantee is remote. As of June 30, 2008, Shangdong Kuangji’s outstanding short term bank loan balance was $7,295,000

Litigation

In the Company’s ordinary course of business, the Company may be subject to certain legal proceedings. After review and consultation with the Company’s legal counsel, management believes that the outcome of the legal matters will not have a materially adverse effect on the consolidated results of operations or consolidated financial position of the Company.

Note 11 - Statutory reserves

The laws and regulations of the PRC require that before a Sino-foreign cooperative joint venture enterprise distributes profits to its partners, it must first satisfy all tax liabilities, provide for losses in previous years, and make allocations in proportions determined at the discretion of the board of directors, after the statutory reserves. The statutory reserves include the surplus reserve fund, the common welfare fund, and the enterprise fund. These statutory reserves represent restricted retained earnings.

F-27

Surplus reserve fund

The Company is required to transfer 10% of its net income, as determined in accordance with the PRC’s accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital.

The transfer to this reserve must be made before distribution of any dividends to shareholders. For the years ended June 30, 2008, 2007, and 2006, the Company transferred $1,159,418, $734,396, and $616,256, respectively, to this reserve. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Enterprise fund

The enterprise fund may be used to acquire fixed assets or to increase the working capital to expand production and operations of the Company. No minimum contribution is required and the Company has not made any contribution to this fund.

Note 12 - Retirement benefit plans

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for the benefit of all permanent employees. The Company is required to make contributions to the state retirement plan at 15% to 20% of the monthly base salaries of all current permanent employees. The PRC government is responsible for the administration and benefit liability to retired employees. For the years ended June 30, 2008, 2007 and 2006, the Company made contributions in the amounts of $308,399, $207,308, and $170,533, respectively to the Company’s retirement plan.

Note 13- Subsequent event

Short term loans

In July 2008, the Company paid in full the outstanding amount of $1,459,000 to Commercial Bank, in satisfaction of its loan terms. In August 2008, the Company paid $977,530 to Industrial and Commercial Bank of China in accordance with the loan agreement.

In September 2008, the Company borrowed $1,459,854 loan from Commercial Bank, due June 2009, monthly interest-only payments; interest rate at 9.71% per annum, secured by certain properties.

Notes payable

By September 2008, the Company paid in full the outstanding amount of $4,377,000 to Industrial and Commercial Bank of China, in satisfaction of its loan terms.

In September 2008, the Company borrowed $1,956,204 notes payable from Industrial and Commercial Bank of China, due in March 2009, 0.05% transaction fee, restricted cash required 50% of loan amount, secured by certain properties.

F-28

(2)

Exhibits

Incorporated by Reference

			Filing
Exhibit			Da te / period
Number	Exhibit Description	Form	End Date

3.1	Amended and Restated Certificate of Incorporation	Form 10-SB	September 26, 2006

3.2	By Laws	Form 10-SB	September 26, 2006

4.1	Form of Warrants to Investors	Form 8-K	May 21, 2007

10.1	Share Exchange Agreement dated May 1 5, 2007 by and among the Company and Shengtai Holding, Inc	Form 8-K	May 21, 2007

10.2	Share Purchase Agreement date d as of May 15, 2007 between the Company and the Purchasers	Form 8-K	May 21, 2007

10.3	Employment Agreement dated May 1, 2008 between the Company and Yiru Shi	Form 10-K	May 29, 2008

16.1	Letter dated May 17, 2007 f r om West Coast Car Company to Ma ntyla McRobers LLC	Form 8-K	May 21, 2007

16.2	Letter dated May 23, 2007 f r om Mantyl a McReynolds LLC to the Securities and Exchange Commi ssion	Form 8-K/A	May 24, 2007

21.1	List of Subsidiaries	Form 8-K	May 21, 2007

31.1	CERTIFICATION - SECTION 302 - CEO	Form 10-K	May 29, 2008
31-2	CERTIFICATION - SECTION 302 - CFO	Form 10-K	May 29, 2008
32-1	Certification – Section 906- CEO	Form 10-K	May 29, 2008
32-2	Certification – Section 906- CFO	Form 10-K	May 29, 2008
99.1	Press release dated May 21, 2007 issued by West Coast Car Company	Form 8-K	May 21, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.

	SHENGTAI PHARMACEUTICAL, INC.
	(Registrant)

	By:	/s/ Qingtai Liu
		Qingtai Liu
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Qingtai Liu	Chief Executive Officer (Principal Executive	August 7, 2009
Qingtai Liu	Officer) and Director

/s/ Yiru Shi	Chief Financial Officer (Principal Financial and	August 7, 2009
Yiru Shi	Accounting Officer)

/s/ Yongqiang Wang	Director	August 7, 2009
Yongqiang Wang

/s/ Wenbing Christopher Wang	Director	August 7, 2009
Wenbing Christopher Wang

/s/ Changxin Li	Director	August 7, 2009
Changxin Li

/s/ Winfred Lee	Director	August 7, 2009
Winfred Lee